Consumer Credit Counceling 101

Here we will go over what you can expect when you go through a consumer credit counceling program.  The first step is realizing that you are having too big of a financial challenge and it’s time to reach out for help.

Step1:  Find a reputable firm to work with

The Justice Department has a list of approved consumer credit counceling programs throughout the US.  Here is a link to their site:  http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm

Step 2:  Assess your situation

Once you’ve found a trustworthy organization to work with they will set up a phone, online or in-person chat with you so they can get a realistic understanding of your needs and how to move forward

Step 3:  Get on a plan

After assessing your situation your credit counselor will offer solutions to help manage your financial picture including budgeting to cover your liveing expenses and paying back your creditors.  They will also contact your creditors and begin negotiating with them.

Here are some of the most popular questions that people have about consumer credit counseling programs.

How much does it cost?

It depends on the funding the program receives from creditors and state laws, but in most cases these services are provided free or low cost to clients.

Will they be able to stop the harassing phone calls and legal actions against me?

Most of the time as they are negotiating with your creditors they can get the phone calls to subside if not stop completely. They will also work with your creditors to delay any legal action while you are in the program and paying your monthly payments.

How do Consumer Credit Counselors get qualified to help me?

In order to become a Certified Consumer Credit Counselor they are required to understand the theories, principles, issues, counseling techniques, and forms that are applicable to credit and financial counseling.  The subjects they are required to master are:

Basic Counseling Principles                                                                                                                                                                                         Budgeting                                                                                                                                                                                                                                      Credit                                                                                                                                                                                                                               Collections & Debt Management                                                                                                                                                                                               Consumer Rights & Responsibilities                                                                                                                                                                       Bankruptcy

Is Credit Counseling private?

Yes, they are required to confidential with your financial situation.

Do they fix my credit report?

No, if there are legitimate concerns on your credit report they will stay there for usually up to 7 years.

Do I need to include all of my debt in to the program?

In order to get the most out of the program it is usaully most advantagous for you to include all of your debts.

Does it hurt my credit?

If you are current on all of your creditors and then it is reflected that you are in program it could signal to future creditors that you are having challenges managing your finances.

Can I use the available credit on my credit cards while in the program?

No, your access to the credit you already have available to you will be suspended while you are in the program

 

Remember, the goal of a consumer credit counseling program is to get you on a sensible path to get your finances in order.