What Is Consumer Credit Counseling?
Consumer Credit Counseling is a program that has been around for nearly 60 years and helps educate people how to pay debts and better manage their money in the future. This program can provide a great deal of insight and aid in helping to resolve credit problems and lower interest rates.
What Are The Advantages and Disadvantages Of Using Consumer Credit Counseling?Consumer Credit Counseling can be a great advantage for a consumer by negotiating with creditors to lower payments and interest rates. Credit counselors usually help a consumer learn about how to manage money and avoid future debt.
The disadvantage is that a consumer may have their credit damaged and be in an even worse financial position if obligations are not strictly paid. Credit counselors are usually more persuasive with credit card companies than consumers, but counselors do not perform any services that are impossible for the consumer. Negotiating with credit card companies directly to lower payments and interest rates is very possible.
How Much Does Consumer Credit Counseling Cost?Most if not all credit counseling service claim to be non-profit but take this with a grain of salt. Credit counseling services will not charge for direct service fees but instead label them under a different name, which can include:- monthly maintenance fees
- monthly donations
- voluntary contributions
- set-up fees
- operating charges
Some of these fees may be legitimate but it is important to always ask how much of the monthly fee goes to the credit counseling company and how much will be going to creditors to pay off debts. If the answer is not direct or does not make sense or seems unfair, shop for a better company.
What Should I Expect From a Meeting With a Credit Counselor?To be provided with the best solution possible, bring all documents showing income and debt. The credit counselor will examine all of the documents and decide which plan may be best suited for the consumer. Before signing any documents or agreeing to join a debt management plan, be sure to ask if they can simply create a budget plan that makes sense. It is not unusual that a better budget be the only solution that is necessary.
Is Credit Counseling Confidential?Yes, credit counselors maintain records like any other financial institution such as banks and keep all records confidential. Credit counselors are not allowed to discuss anybody's financial situation and records will be secure.
Do I Need an Attorney To Assist Me?An attorney with experience dealing with credit issues will be able to advise you about your debt and inform you about all possible solutions. If you have any problems with a credit counseling service, an attorney will also be able to help you. |
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