How Credit Counseling Can Lead To Better Personal Finances
One of the most common financial problems is poor credit, and unfortunately, many people develop bad credit scores and staggering financial debt because they’re unaware of some of the basic principles of personal finances. Credit counseling services can help many people to develop a long-term strategy and to take immediate steps to improve their financial situation. Whether or not you consider your credit to be in good or bad shape, the right credit counselor can be a very helpful resource. A few of the benefits of credit counseling services are:
- A better credit score
- Lower amounts of debt through structured repayment
- Developing an individual approach to long-term finances
- Valuable investment and financial product advice
Getting Good Credit versus Debt Consolidation
Credit counseling is very distinct from debt consolidation, but many people are confused about the differences. Debt consolidation involves a lot of negotiation between credit card companies and an individual (or, more often than not, a representative of that individual) and can result in a hit to the person’s credit, though less overall debt. Credit counseling services may involve some amount of debt consolidation, but they’re generally more focused on improving or maintaining a person’s credit score while addressing problems like debt. If you’re not sure whether you need credit counseling services or debt consolidation, it’s best to contact a credit counseling service first; they’ll be able to help you decide whether the risks of debt consolidation are worth the rewards.
Finding a Credit Counselor
Before using a credit counseling service, it’s very important to fully evaluate them to make sure that they will offer helpful, accurate services and suggestions that will actually improve your financial status. One great way to evaluate a credit counselor is to call the office and ask about any organizations that the counseling service is a part of. Most major credit counseling services are accredited by the National Foundation for Credit Counseling (NFCC), and the NFCC’s website can be a good place to start searching for a credit counselor in your area. Make sure that your credit counselor’s services are completely confidential and read as much information as you can find about the counselor.
Free Credit Help Services
There are some reputable non-profit organizations that provide consumers with free credit help and advice, including audits that can help to spot errors in credit reports and the like. These services are a great resource and can help you to quickly improve your credit and your overall financial circumstances. However, it’s important to ask about which services they offer. Make sure that you won’t actually be paying for anything that you don’t know about, and be exceptionally wary of services that claim to offer free debt consolidation and credit counseling yet offer no information as to their non-profit or for-profit status.
What a Credit Service Offers
Improving your credit takes a lot of time, so don’t expect instant results. A good private credit counseling service will tell you what actions to take to remove bad items from your credit history or will work on your behalf to get these items removed. They might also help you to make sure that you’re aware of all of the lines of credit that you have open. Credit counselors will explain how your credit can impact your long-term financial strategy, and many offer supplemental financial planning services. However, the core function of a counselor is to improve your credit, and you should expect results within a few months of hiring the professional.
Credit counseling can be valuable in a variety of situations, and whether your credit score needs a complete overhaul or a slight tweak, the right credit counseling service can be extremely helpful in turning you in the right direction.