A non-profit credit counseling agency can be an excellent choice for consumers who are struggling to pay their bills and fear their credit rating is perhaps slipping. Credit counseling can potentially stop collection calls from harassing creditors and put consumers back on track for having a good credit rating. Most people who have availed themselves of the services of credit counseling agencies have successfully gotten out of debt and many have even started to build an emergency savings fund. With the assistance of properly trained credit counselors, more consumers than ever are learning what it feels like to live a debt free life.
The credit counseling process begins with the collection of information including debts and income. The counselor typically analyzes the client’s financial situation and makes recommendations for methods through which the consumer can improve their financial status. There are a few non-profit credit counseling agencies that offer online credit counseling as well, like Advantage Credit Counseling. The online credit counseling session can be completed from any computer and it is completely confidential and 100% secure.
The best credit counseling agencies provide a full range of customer focused services and many of these services are free of charge. This typically includes budget counseling, in which an advisor helps the consumer to develop a monthly realistic budget they can live with. Included in the budget will be components like investing for retirement and building savings for a “rainy day”. Budget counseling is one of the most valuable services provided by credit counselors since having a good budget in place is the very first step to breaking the debt cycle.
Sometimes, the most helpful assistance that can be offered by a non-profit credit counseling agency is a debt management plan, or DMP for short. The counselor essentially negotiates with creditors from whom the consumer has borrowed unsecured debt. Negotiations with creditors usually yield results like lower interest rates and the elimination or reduction of many fees. At the conclusion of negotiations and the acceptance of the DMP by both parties, the consumer will begin making one monthly payment to the counseling agency. The money is subsequently distributed to the appropriate creditors each month.
A DMP makes the consumer’s financial life far easier. Only one monthly payment is made for unsecured debts, translating to much easier bookkeeping and less time spent paying bills. You can even set up a direct withdraw from your bank account each month with most credit counseling agencies for added convenience. Additionally, with lower interest rates and fees, most consumers who are on a DMP are able to pay off their debts much faster than they otherwise could. In most cases, people are able to pay off their unsecured debts within about 30 to 60 months, depending on the amount of debt. Compare that to the 10 or 15 years that might be required to pay off debts without a DMP because of high interest rates, and it becomes quite clear that a credit counseling agency can provide tremendous benefits to the consumer.