Have you ever heard of credit counseling? While credit is only named specifically in the title, there is a lot more to be gained from this service. Credit counseling can offer a big picture look at your finances. Additionally, it provides a detailed budget, an action plan and financial education.
Credit Counseling Can Offer Financial Literacy & Freedom
What is Credit Counseling?
Credit counseling is a financial service designed to educate consumers. Participants will learn how to pay off their debts and how to avoid debt in the future. A counseling session involves an analysis of a consumer’s financial situation. This includes an evaluation of debt reduction strategies for paying off or managing debt and education about money management. Credit counseling helps consumers who are struggling with debt to better control their financial lives.
As a result of the session, each expense, interest rate and other costs are organized and calculated. You can learn how much you earn and spend in a month. Plus, you can learn how much you spend in a particular budget category. For instance, you may learn that 50% of your budget is housing related. However, you may also learn how much debt you are truly carrying and need help for credit card debt.
Outcomes of Credit Counseling
Once you have a budget assessment complete, the counselor will walk you through your financial goals. Maybe you need to know your debt relief options or maybe you just need to know how to trim the budget to save more money. All this can be accomplished with a free credit counseling session. Plus, ACCC provides newsletters, articles, and a website full of tools as additional resources. If there’s ever a time to gain clarification on any questions you may have, take advantage during a session. In a larger sense, financial education can help you better manage money and stay out of debt in the future.
There are a few possible outcomes credit counseling can offer. Here are some examples:
- Enter a Debt Management Program
- Receive a bankruptcy recommendation
- Learn your finances are on track
- Find that you can resolve your debts without assistance
If you do need to eliminate debt, a non-profit credit counseling agency, like ACCC, can work with you and your creditors to receive reduced fees, lowered interest rates and lower payments. By lowering the payments and these additional adjustments, you are able to actively pay back your debts rather than settling or filing bankruptcy. No harm will come to your credit when you enter into a Debt Management Program (DMP). Finally, remember that you will be supported each step of the way.