Consumer Credit Counseling Services

How do you know if you need consumer credit counseling services? There is a lot of misinformation out there, so it’s important to know the facts. Here are some simple facts and tips about this alternative to bankruptcy that you may want to keep in mind before you select a company to help you through your tough financial times.

Before you can know if you need consumer credit counseling services you should know the facts. Since these are basically one of the many alternatives to bankruptcy, and as such, it will negatively impact your FICO score. Still, the banks are coming around on this, realizing that this is a repayment plan and not bankruptcy. Consumer credit counseling services may be a better alternative for you. If you would prefer to avoid bankruptcy, you may need to explore this option of debt management and control to help get your finances in order.

You need to know that most consumer credit counseling service companies are nonprofit. You should check with the Better Business Bureau to know for sure. The companies that are nonprofit allow you to pay your bills off faster. It is, essentially, a repayment plan. It is important to you that you pay off your bills, you may to consider this method. If you decide to sign on with any agency to help you pay off your debt, paying them large fees for profit will set you back.

Nonprofit consumer credit counseling services will charge you a small fee for administrative costs. The fee is very reasonable. Know that they will, in turn, work with your creditors for you. Generally, they can get all creditors, even charge card companies, to reduce or even eliminate the interest you’re paying. You will typically make one payment to the company and they will disburse the funds to all of your debtors.

You should know that these companies will work with you to make the payment plans fit within your budget, within reason. You should realize, however, that payments must be reasonable. If you need to reduce your monthly payments, this type of debt management program may be right for you. Before you decide if consumer credit counseling is right for you, it’s important to learn the pros and cons.

In order to decide if you need consumer credit counseling you should also consider the downside. This will hurt your score and rating, perhaps nearly as much as bankruptcy. In addition, charge card companies may require you to surrender your account cards in exchange for the reduction or elimination of interest. If your score is already in the tank, you may need to consider this option.

This industry has taken off with the poor shape of the economy. As a result, there are some companies out there looking to rip you off. Look into the company with the Better Business Bureau for assurance. Make sure they have a solid track record, so you select the right consumer credit counseling service to suit your own personal needs.