The 1 2 3 in Finding a Credit Counselor
Looking to purchase a home and found out your credit just won’t cut it? Trying to figure out a way our of this debt that has spiraled out of control? Consider credit counseling.
We all wish that successfully negotiating debt with creditors was easy but it’s not. Many of us do not have the skills or knowledge to successfully negotiate debt settlement. Here is where debt counselors come into play. Debt counselors are the people who can assist with getting a calming relationship with your creditors. Finding a good credit-counseling program can be a bit complicated. That means you will have to do careful research. Here are a few things to keep in mind to make the task a little easier.
First, look for a nonprofit company. Nonprofit debt counselors get most of their funding from creditors, so the cost to you will most likely be affordable. Be sure to also ask if the organization belongs to any professional groups, such as the NFCC or the Better Business Bureau. These rankings confirm the credibility a debt counselor and their firm.
Ask detailed questions and find out exactly what services you will be receiving, such as the amount of counseling, a debt-repayment plan and budgeting advice. The more services they provide the better. Also, have them provide this information to you in writing and send it to you before you proceed. Ask about services beyond a debt consolidation. Get the facts, everything should be disclosed upfront.
Once you’ve found a service you trust, get together all your bills so that you can assist the debt counselor in figuring out what you owe and determine how much you can afford to pay each month. Once this phase is complete, you will be able to write one check, instead of several checks, and they will disburse the money to your creditors. When payment schedules have been set up, the counselor will talk to creditors and make an effort to get them to reduce your interest rates, and waive late fees to shorten your time in debt, and possible report your past-due amounts as current.
Once you’re on your way to paying off your old debt, you should then begin to plan a budget, which the credit counselors should also help with that as well. Most people do not know how much they spend each day. We can keep track of the big-ticket items such as the rent and mortgage payments and the utility bills, but lose track of how much they spend on extras like restaurants, dry cleaners and video rentals. If you write down everything you spend, you may be shocked at how much money you go through. Debt counselors can help you track your spending. They teach you to record what you pay right down to the penny. Counselors are trained to walk debtors through every spending category and come up with an acceptable budget. The counselors should also check in with clients over the next several months to see how well they’re sticking to their budget spending plans.
Before you pay an outside counselor for help, however, you should be sure that you’ve tried all the easy solutions first, such as considering a loan from a family member or even using your entire tax refund check to pay off your debt.
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