How Credit Counseling Works

How Credit Counseling Works

If you're consistently struggling to manage your debts and pay bills on time, you may want to look into credit counseling. With the help of a credit counselor, you can learn to manage your money, pay off your debts, develop a budget, and create a personalized plan to tackle your money problems. The process encompasses both a financial review and education, taking your entire financial situation into account. So how does credit counseling work? For more details, please scroll down.

How Does Credit Counseling Work?

First, let's discuss when credit counseling might be necessary. Take a hard look at your financial situation and ask yourself these questions:

Have you accumulated a large amount of debt? 
Are you living on a tight budget? 
Is your credit score suffering because of your financial health?
Do you often max out your credit cards?
Are bills and debts a source of contention in your home? 
Have you hid bills or financial information from your spouse? 
Are you getting calls from frustrated debt collectors? 
Have you been digging into your retirement account to pay your debts? 
Do you often use cash advances or payday loans? 

Whether you suffer from one or all of these financial issues, you could benefit from the assistance of a credit counselor. Although you may feel overwhelmed with your current situation, remember that the sooner you acknowledge the problem, the sooner you can address it and solve it.

Finding a Counselor
To ensure that you're working with a reputable company, we highly recommend that you find a credit counselor through the National Foundation for Credit Counseling (NFCC). Founded in 1951, the NFCC is the largest and longest-serving nonprofit financial counseling organization in the United States. When you use a counselor approved by the NFCC, you know that you can trust them to provide quality services for an affordable price. Many of these counselors can provide their services online or on the phone, but we recommend in-person counseling if possible.

Unlike debt settlement companies, which help people negotiate with their creditors and reduce their debts for a substantial fee, credit counseling sessions cost very little. In fact, they're often free! A credit counselor will offer advice to help you create an efficient budget, develop a debt management plan, and make better financial decisions. Although your credit counselor may recommend that you enroll in a debt management plan (DMP), this is not required and it is not the same thing as credit counseling.

The Counseling Process
So how does credit counseling work? Well, once you find the right credit counselor for you, you will meet with them and present your current financial situation, including your debts, bills, savings, income, and more. Your counselor will review these facts and offer expert advice. For example, they may identify places you can save money to create a more effective monthly budget. Or, they might help you navigate your debts and determine where you stand with your creditors. Once the process begins, your counselor will lead you through each step. As long as you're honest about your finances and willing to follow your counselor's advice, there is no reason why you shouldn't have a successful outcome.

To learn more about credit counseling, please visit the National Foundation for Credit Counseling website. And when you're ready to connect with an NFCC-certified consumer credit counselor, call 800-388-2227 or click here to get started online.

Are you interested in joining a credit union? If you live or work in southwest Missouri, check out BluCurrent Credit Union. With our unbeatable loan options, 6,800 shared branches across the country, and fantastic customer service, we might be the perfect financial service for you. To learn more about our services and benefits, please stop by one of our branches or explore our website

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