Is Credit Counseling Right for You?

Are you the perfect candidate for credit counseling? Who is even qualified for credit counseling in the first place?

Well, literally everyone is qualified for credit counseling.

Also called budget and debt counseling, credit counseling is a free service that is available for everyone who would like to take part. Most of the people who participate in credit counseling sessions deal with unmanageable debts although it is not a prerequisite to have a debt. Here are a few important things that will help you in understanding Is Credit Counseling is Right for You?

Who Will Need Credit Counseling?

A person who is concerned regarding the present state of their finances may potentially take advantage of talking with a trained counselor. The process of credit counseling can offer many benefits for people who are having a hard time making ends meet every month, whether this is because of abnormally high expenses or due to carrying large amounts of debt.

What to Expect from a Credit Counseling Session

Your financial situation is the center of discussion during credit counseling together with professional advice and guidance meant to help you address issues and achieve goals. The credit counselor will basically map out your expenses and income and come up with a budget according to the way you spend money. They will also get a copy of your own credit report and go through the status of your existing debts.

Using these details as the main framework, you and the counselor will discuss all of your financial goals. Are there specific changes you wish to see? Are there feelings that may hold you back?

After having a good understanding of your current situation and your goals, your counselor will develop an action plan that will include all recommended steps you can take to help you reach all of your goals.

A DMP or debt management plant is among the steps that credit counselors recommend. DMP is the creditor-negotiated plan for repayment meant to suit your financial ability and your capacity of repaying eligible debts within a set timeframe, often 5 years. Once you determined that DMP suits you, some fees might be involved. You are not obligated to start a DMP after you complete your credit counseling session.

What to Bring During a Credit Counseling Session

There is actually no need for you to bring anything during your credit counseling session. However, it might be helpful to have copies of your latest bank statements and bills available. These can help the counselor to have a more accurate understanding of where your finances are at the moment.

Will Credit Counseling Hurt Your Credit Score?

Don’t worry because talking to a credit counselor won’t affect your credit score in any way and there will also be no report of it on your credit report.

However, if you choose to enroll in the debt management plan, creditors may opt to include a notation to these debts on the report. Such notations will not affect how your credit score is calculated.

Credit counseling sessions are kept confidential so you can be sure that you will get the help you need in no time. We are hoping you understand every aspect of this topic Is Credit Counseling Right for You.