When your finances are under strain, a credit counseling service, or debt counseling service, can advise you on budgeting, paying off debt and managing your money. A credit counselor can also help you create a plan to help make unsecured debt payments more affordable and help you avoid bankruptcy. If your debts are beginning to feel overwhelming, or you need help getting a handle on your finances, here’s how credit counseling can help.
What is Credit Counseling?
Credit counseling is a free service offered by nonprofit agencies to help individuals get a handle on their finances. A certified counselor will review your full financial picture, which includes your income, expenses, and debts. Based on that information, they’ll help you build a customized action plan to get back on track.
Benefits of Credit Counseling
There are many benefits to going this route; the biggest one being support. Dealing with debt can be stressful. Credit counselors offer support and guidance, helping you navigate your financial challenges with confidence and reducing the emotional burden of debt. Credit counselors have experience dealing with the whole spectrum of issues that weigh consumers down. They can help you create a manageable household budget and prioritize your spending, provide you with educational materials or access to seminars on personal finance topics, and/or set you up on a debt management plan which allows you to roll several of your credit card balances into one monthly payment at a reduced interest rate. This plan typically lasts from 3 to 5 years, during which you’re not allowed to add to your credit card debts. The goal of a DMP (debt management plan) is to completely pay off your outstanding financial obligations.
Who Should Use Credit Counseling
Credit counseling isn’t for everyone. It’s not a good option if most of your debt is in secured loans such as mortgages, auto loans, or home equity loans. Credit counseling might be a good idea if you have reliable income, are prepared to stick to a payment plan, and are ready to make sustainable, long term changes to your spending.
Conclusion
Being in debt is nothing to be ashamed of. Knowing the options available to you can help you take control of your finances and reclaim your peace of mind. Working with a credit counselor or credit relief services such as PDS can help you better understand your finances and the choices you have for improving your financial health.
