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Credit Counseling

The Basics

If you’re starting to realize that your financial situation isn’t looking too strong, and you feel like you might not be able to fix it all by yourself, then you might want to think about credit counseling. This type of financial counseling will help you through your current debts, and it will also give you resources to ensure that you don’t end up in the same situation again. You’ll be able to talk with a professional financial counselor who will look at your finances and create a custom budget plan that doesn’t just look good on paper, but is actually feasible in real life.

The Process

First, you’ll have to give over a bunch of financial details to the consultant you choose. You won’t have to give information like bank account numbers, but you should be ready to share details regarding your monthly income, your total amount of debt, the types of debts you have, what you have been able to pay thus far, and any other expenses you pay for (including essentials, like food and gas, versus non-essential items). It can be intimidating to give all of this information to someone you barely know, and financial advisers know that. A good consultant will make you feel as comfortable as possible, but it’s important to remember that he/she will not be able to provide you with the best service possible unless you’re completely honest. Your counselor will then want to create a budget for you based on your lifestyle, your essential bills, and the debts you have left to pay. Remember not to be offended if he or she points out ways that you’ve been using your money irresponsibly -- the goal isn’t to embarrass you, the goal is to help you see how to make the most of your money. Everyone makes poor financial decisions from time to time, and you certainly won’t be the only one to whom your counselor has given that advice. Looking at your current debts will also be an important part of your counseling sessions, and this adviser will be able to let you know if you’ll be able to get back on track by simply reprioritizing your loan payments, or whether you should look into a more aggressive solution like a settlement or debt consolidation loan. There are a variety of ways to undergo credit counseling: whether you prefer meeting face-to-face, over the phone, or online, there are plenty of consultants out there who can accommodate your schedule and your preferences. The best way to find a good consultant or consulting agency is to check with the National Foundation for Credit Counseling (NFCC) and see which agencies have been certified under their requirements. Keep in mind, credit counseling services should be free. If an agency demands payment -- especially any fees upfront -- be very wary about divulging too much personal information before making sure that the agency is legitimate. Ultimately, the purpose of credit counseling is to give you a bit of a boost when you feel like you’re falling behind. Sometimes you just need another set of eyes to evaluate your spending habits and to see where you could make cuts; sometimes knowing that another person is monitoring your payments is a good way to make sure that you pay all your bills on time. Remember: credit counseling isn’t forever, and it isn’t something to be ashamed about. Debt relief experts aren’t trying to keep you in debt forever so that they can keep you as a client; many of these experts have struggled with financial problems themselves, and they honestly want to help other people become financially independent.
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Questions, issues or concerns? I'd love to help you!

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