Jan 12 2012
The Benefits And Disadvantages Of Consumer Credit Counseling
Is your debt getting out of hand? You should ask for help sooner rather than later.
You should opt for consumer credit counseling the minute you realize that you are unable to pay your bills on time, or are unable to pay the monthly minimums on your credit cards. There is no point in reaching the stage where debt collectors start showing up on your doorstep every morning to extract their dues.
Credit counseling can give you some ideas of how to manage the debt. You may even become disciplined financially. You should also know that not all the credit counselors are reputable. It’s really important that you choose the right counseling service.
You should be careful of organizations that charge you more than the usual $10 up-front fee. You should avoid services that offer to settle your debts at little or no money, because they are probably illegitimate.
You should check if the firm is registered with the National Foundation for Credit Counseling or with the Association of Independent Consumer Credit Counseling Agencies.
You also have to make sure that the payments made to the firm are transferred to your creditors punctually. Late or missing payments would not help your credit rating, and if this occurs regularly, then discontinue with the firm.
Usually, credit counseling is thought of as a double-edged sword. On the one hand, it helps you manage your debts better. On the other hand, it sabotages your reputation with creditors. But then, the advantages are so much greater than the disadvantages. While a few creditors may be wary of lending you money again, most of them will still be willing, once you have cleared the debts with the help of credit counseling. Another good thing about credit counseling is that you will have better credit rating once you’ve cleared your debt.
It’s also very important that you research properly and choose a service that will not damage your credit rating further. For example, you should avoid a company that tags you as a credit delinquent, and go for one that would tell your creditors that your decision to take up credit counseling is a good option.
You should be aware that credit counseling works well. Unfortunately, if you are too far into debt and nearing bankruptcy, this service will be of no use to you. It is also important to curb your spending urges; otherwise, whatever advantages that accrue from credit counseling will be lost.
Credit counseling works. You should try it. You may soon be relieved of those debt worries.
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