Is Credit Counseling Right For You?

One of the most pervasive problem in American households today is financial debt.  A survey conducted by The Plastic Safety Net, a news report by Demos and the Center for Responsible Lending reveals that "$8,650 is the average credit card debt of a low- and middle-income indebted household in America".   Apparently many people today are in denial of this fact claiming they are managing their money properly, yet concerned about not being able to pay their accumulating bills. If you were asked whether you are having a problem with bad credit, would you say yes? 

Questions to ask yourself regarding your current financial situation

• Do you often find yourself in the middle of an argument with your partner because of money issues? 
• Does the phone ringing annoy you, or fill you with dread, knowing it’s the creditors reminding you again of an overdue bill or credit card payment? 
• Are you having sleepless night worrying about how you will pay all your bills this month?    
• Do you risk your money in gambling in the hopes to pay your debts? 
• Are you being bombarded by stacks of past due notices in your mail box?
• Do you routinely only pay the bill when the envelope changes color or threatens a 10 day disconnect?

If you answered yes to these questions, then you maybe in need of some credit counseling.  Don’t worry.  There is help available. 

How credit counseling can help you

Credit counseling will provide you with a custom made debt-management plan suited to your special needs.  The benefits of working with a credit counseling service are:

• The money you pay to your credit counseling company will be paid to your creditors in your behalf.  They would make sure that your bills are being paid on time, and your credit accounts will be monitored to assure that all details are correct and updated. 
• You wouldn’t have to worry about making multiple payments to different creditors; instead your credit counseling service will distribute the money to your creditors.  It will be taken care of for your convenience. 
• Through Credit Counseling, you may receive other benefits from various creditors such as lower interest rates, waived late fees and lower payments of up to 30%, an updated account,  and debts payable to as many as 20 years to fewer as 5 years.  

Recommended Resources

Choosing the right credit counseling service

Be careful in choosing the right credit counseling service as your partner. Remember that Credit Counseling will not wipe out your debts instantly but it will assist you in re-establishing your financial credit reputation. Do not trust companies that advertise Credit Repair instead of Counseling and promises instant deletion of your debts.  If you are advised to make false statements on applications or any step that seems illegal, do not comply. Under the Credit Repair Organizations Act, a credit repair company must not require any payment from you until they have accomplished their promised services. You must also be given a written contract that states all your rights and obligations. A copy of a pamphlet called Consumer Credit File Rights Under State and Federal Law must also be handed to you before you sign the contract. 

If managing all your debts is getting too much for you to handle and you have been under a lot of stress dealing with your creditors, credit counseling is here to help you.  Yes, it’s about time you stopped stressing over your current financial status and  launch a debt-management plan.  If you haven’t taken this action yet, it’s not too late to start today.

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About the Author Liz Roberts is a loan consultant with NewHorizon Finance and has been providing consumers and business owners with financing since 1989. Bad Credit? Join our credit repair mailing list for tips on building and repairing your credit yourself, without hiring a credit repair service. Click here for a list of bad credit unsecured credit cards Free reprint rights with full credit to the author. Please reprint everything within this box. Copyright 2006