Benefits Of A Consumer Credit Counseling Service
Credit counseling isn’t about doing something on your behalf that you can’t do on your own. Rather, credit counseling is a way to provide you with support, resources, tools, and connections to help you approach debt elimination in best possible way. Take a good look at the progress, or lack of it, that you’ve made up to now. That should be a good indication of whether or not you need the help that Credit Counseling can offer.
What Is Consumer Credit Counseling Service?
A good counseling agency will develop a customized approach to get you debt free as soon as possible. This is good news as USA Today shared that credit card debt per borrower increased. The plan will involve a detailed budget and will vary depending on your income, expenses, and amount of debt. The counselor should meet with you personally several times to address your questions and concerns.
This usually leads to a debt management plan that the agency offers. That means the agency will form an agreement with your creditors to lower interest and fees on your behalf.
The debt management plan starts with a single monthly payment made to the debt relief company. The creditors and the client need to reach an agreement first before the payment can start. The debt relief company then makes the payment to the creditor. Having the debt relief company there to manage the debt repayment gives creditors reassurance that they’ll get their money each month.
New Regulations for Consumer Credit Counseling
According to Federal Trade Commission regulations, credit-counseling services cannot charge any fees up front. Some of the things you need to know upfront are success rates, fees, and even promotional deals. Debt-relief companies also must disclose how long you should wait before seeing results. They also need to tell you how much the service will cost you overall.
Some Credit Counseling Services will require you to put money into a dedicated account, which will then be used to pay your creditors. The account must be maintained at an insured financial institution that has no affiliation with the agency, and you should be allowed to withdraw funds at any time without penalties or fees.
Where should I go for Consumer Credit Counseling Services?
Start by checking with the United States Trustee Program or the National Foundation for Credit Counseling (NFCC), both of which are organizations responsible for identifying legitimate debt relief services. The Better Business Bureau can tell you if the credit counseling service you’re considering has any consumer complaints against it. Your local consumer protection agency can also give you the same information.
Get additional information on how credit counselors help consumers take control of their finances with valuable, professional advice on budgeting, paying off debts and more.