Benefits Of A Credit Counselling Program

Posted on: 18 March 2015


If you are struggling financially and are unsure as to how to get your financial life back on track, you may consider credit counseling. Credit counselling is a great alternative for those who don't have the ability to file for bankruptcy, or who just don't want to take a hit on their credit by filing for bankruptcy. Credit counselling is not for everyone, and it truly depends on how bad your financial trouble is, but it does not hurt to explore the option. This article will give you an overview on credit counselling and how it may be beneficial for your situation.

Rebuild Your Credit

Credit counselling helps you reestablish and rebuild your credit. When you enter into a credit counseling program, you will create a repayment plan that is affordable. The counselling agency will work with your creditors to come up with a plan that is agreeable to both you and the creditors. It is important to remember that in no way is credit counselling a quick fix, but it can go a long way in helping you repair your credit and start over financially.

Three Step Program

When you enter into a credit counselling program, there is essentially three parts to the process:

  • Assessment. The first thing the program will do is assess your current financial status. The service you use will see how bad your finances are, because not all situations are going to benefit from using a credit counselling service.
  • Establish a plan. If your situation qualifies for a credit counselling plan, the service you use will work directly with the creditors to see if they are agreeable to a restructured payment tier. Not all creditors may agree to this plan, but if you haven't been making timely payments, the creditor may agree to the plan knowing that they will start to recoup some of their money. 
  • Educate. The credit counselling agency will provide you with in-depth credit education. This is extremely important, because you need to learn how to manage your finances and most importantly, manage your debt. 

Even if you find that you don't need counselling, it still may be beneficial to enroll in some type of credit education class. Many credit counselling services offer these types of classes to consumers who just want to know a little more about debt management and budgeting. Either way, following a credit counselling plan can be a slow process that at times takes a lot of discipline, but in the end you'll feel much better knowing your finances are back on track. 

For more information, contact David Reynolds & Associates or a similar firm.