Is Consumer Credit Counseling a Good Idea?

Written by J. Hirby and Fact Checked by The Law Dictionary Staff  

There are many individuals who are not able to stay current with their financial obligations. This may be due to having over extended credit card debt, poor math skills, loss of income, unexpected large medical expenses, or any number of other individual situations. Some people do not understand the importance of keeping their checking account balance current by deducting all written checks and ATM withdrawals and fees. These types of actions can result in someone having trouble maintaining even minimal monthly payments, constantly paying late payment fees, seeing the interest on revolving credit accounts go up, and paying anyway from $25 to $35 each time a checking account is overdrawn. Beyond having no control of their money management, individuals in these circumstances will also have a lower credit score that will definitely impact their borrowing ability regarding automotive loans and mortgages.

These individuals are the perfect candidates for credit counseling services. Anyone who wants, or needs, to learn how to develop debt management skills will benefit from the advice and services of a credit counseling agency. A credit counseling service is a non-profit local organization that provides free financial education, training and services to all consumers; not just to those individuals who are in immediate need of money management techniques.

A good consumer credit counseling service, with qualified trained credit counselors, will:
–Offer free analysis of someone’s financial situation
–Provide several solutions to each person’s individual financial requirements, either through a personally designed budget plan or through the assistance of a debt management plan
–Provide on-line, in person and telephonic counseling
–Recommend a debt management plan, when needed, to control current financial obligations and to help improve credit scores
–Provide financial education courses which may involve a course training fee

When someone is considering using the services of a credit counseling organization, it is recommended that the consumer research a credit agency before providing a firm with a lot of personal and financial information. The reputation of a credit counseling agency can be checked with the State’s Attorney General, the Federal Trade Commission, and the Better Business Bureau. These organizations will know if a credit counseling firm has had any complaints or allegations of fraud lodged against the firm and how the issues were resolved. Even excellent counseling firms may have an occasional complaint when someone is not satisfied with his personal counseling experience.

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