Jason Holmes asked:


Credit counseling is the process by which consumers are made aware of the consequences that they may face should they mismanage their finances. The main objective of credit counseling is to help out consumers get out of debt through reduced rate of interest and careful budgeting. Rate of interest is reduced by negotiating with the creditors.

Credit counseling is offered by companies as an efficient tool for financial planning. An efficient credit counselor will assess the current financial situation of a debtor and work out for the best possible solution for debt reduction.

The following instances may drive you to opt for credit counseling-

It has been observed in majority of the cases that under the following circumstances, consumers choose a credit counseling session.



A debtor has decided to file for bankruptcy and wants to give it a last try to repair his financial condition.

If a debtor has fallen behind by a couple of payments and is seeking a way to regularize them can opt for credit counseling.

If a debtor has been making regular payments and has not defaulted but fears that a credit crunch may result in near future, may also take advice from a credit counselor.



Fees charged for credit counseling-

Usually, the fees charged by a credit counseling company depend mainly on the income of the consumer. Fees comprise a monthly fees as well as a start up fees. As per industry standards, the fees charged by a credit counseling company cannot exceed 20% of the monthly income of the consumer.

The credit counseling industry is booming-

The credit counseling industry is currently a USD$7 billion industry. Over the years, the industry has grown by leaps and bounds. Earlier, there used to be very few credit counseling companies offering quality services to the people. With increase in the number of the credit counselors, fraudulent activities have also become rampant.

Credit counseling has earned some unfavorable judgment-

Reports have suggested that there are many companies who “fly-by-night” and leave individuals lamenting. In fact, the FTC or the Federal Trade Commission has received innumerable complaints against such fraudulent companies. These may be regarded as some of the reasons why not all consumers rely on credit counseling. There have been many instances when consumers either had to drop out of credit counseling sessions or were cheated off their money.



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Henna Youngman asked:


Debt consolidation credit counseling might be just what the doctor ordered for you or not. If you are drowning and debt and don’t what to do a credit counselor may be able to help.

Debt Consolidation Credit Counseling is Not Hard to Do

Your first contact at a debt consolidation credit counseling agency is often a credit counselor. A good credit counselor will want to meet with you locally in person first. The counselor will provide you with customized education and what your option are before you need to make any choices. The primary service that most credit counseling agencies provide today are Debt Management Plans (DMP). With creditor approval a debtor submits a lump sum to their credit counselor as a key feature of a DMP.

Finding a Debt Consolidation Credit Counseling Agency

It is hard to find good debt consolidation credit counseling for several reasons today. Helpful places to start looking are the National Foundation for Credit Counseling (NFCA) and the Association of Independent Consumer Credit Counseling Agencies (AICCCA). You can find recommendations to follow up on by doing your own due diligence. Once you have a short list of credit counselors in your area use Google to search for positive and negative reports on each agency. Make sure they have a clean record with the local Better Business Bureau as well.

Beware Aggressive Debt Consolidation Credit Counseling

There are more scam debt consolidation credit counseling agencies today than ever before. Protect yourself by doing your homework before meeting with any counselors. Check out the debt consolidation credit counseling agency online and with the Better Business Bureau. Look out for upfront payment demands

Credit Reports and Debt Consolidation Credit Counseling

You are entitled to a free copy of your credit report from the three major bureaus annually. Get a copy and review it before you take on any debt consolidation credit counseling. After completing counseling or a DMP check your credit report again for any notes or improvements. Some positive benefits to your credit report could be the removal of delinquent payments or “re-aging” of your accounts by creditors. Lenders may take credit counseling as a plus or a minus depending on their bias to words lending.

Do I Need Debt Consolidation Credit Counseling Before I File For Bankruptcy

There have been some important changes to understand with the adoption of the Bankruptcy act of 2005. You must complete federally approved credit counseling at least six months in advance of filing for bankruptcy. So even if bankruptcy is your preferred choice of action a good understanding of credit counseling is still needed.

Debt consolidation credit counseling can help you to take care of business. Do your research and find a great credit counselor. Don’t procrastinate get on with it immediately.



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