This page is about Consumer Credit Counseling - General FAQ's
Also See:
Credit Counseling - Questions about Debt Management Program
Credit Counseling - Questions about Bankruptcy
Credit Counseling - Questions about Credit
Credit Counseling - Family Service
Credit Counseling - Non-Profit
Credit Counseling - Credit Counseling Service or Agency
Here, we try to answer most common questions about Consumer Credit Counseling.
What is consumer credit counseling?
Consumer Credit Counseling is about 60 years old and has educated financially distressed consumers how to pay debts and better manage their money in the future. Consumer Credit Counseling has also changed from small, community-based non-profit organizations that charged almost nothing, to a new breed of large, high-tech organizations that frequently claim non-profit status but in reality charge exuberant fees.
Why would you need credit counseling services?
If you can't resolve your credit problems yourself or you need additional help, you may want to contact a credit counseling service.
There is a big advantage FOR YOU, the consumer to use a good credit counseling or consumer credit services, CCS. Basic idea is that credit counselors negotiate with the creditors on your behalf so your payments become manageable. To achieve this, creditors would have to agree on reducing your interest rates and extending repayment time on credit card debt and other unsecured debt. Sounds good?
Whether it's beneficial for you to use a debt repayment program depends on many factors. Sometimes using it will damage your credit, sometimes it won't. With the right credit counseling program, making minimum payments you should be able to pay off credit card and other unsecured debt much, much faster than with the one that your credit card plan offers. The bottom line is to save money and not to go nuts, right?
A word of caution - credit counseling fees?
Most if not all Credit Counseling services claim to be non-profit but don't take this for granted. CCS often do not officially ask for servicing fees. The names are monthly maintenance fees, monthly donations, voluntarily contributions to cover their operating costs and sometimes one time set-up fees. The point is those fees must be low enough to make sense for you. So always ask a question - how much of you monthly payment goes to CCS and how much goes to the creditors to pay off my debts.
What type of counseling is available?
Agencies offers a range of services to help you become debt free and in control of your financial future. Specific services include:
Debt Consolidation Planning
Credit Report Review
Money Management Education: customized Money Action Plan, money management education, confidential budget
Homeowner Counseling: mortgage delinquency counseling, and homebuyer education
Assistance in reestablishing credit
Counseling is available online, by telephone, and in person
Who are Consumer Credit Counselors?
These services are administered by Certified Consumer Credit Counselors who must meet high quality standards, and pass third party counselor certification exams.
Most of consumer credit counselors have financial and/or counseling backgrounds.
What is required to become a consumer credit counselor?
Each counselor is required to obtain and maintain a Consumer Credit Counselor certification that is enough to assure his or her counseling proficiency. To became certified, each counselor must receive specialty training and then pass test through TestTutor, Inc. or a similar testing service.
What should I expect from my meeting with a Credit Counselor?
You will have to bring documents showing your income and your debt, and the credit counselor will review your financial situation and offer you a debt consolidation program or may be an education. Of course, their goal is to get you enrolled into a debt management plan, so before you agree, see if they can help you design a budget plan that will let you out of your debt without consolidation.
Is credit counseling confidential?
It is. Think of it as of going to a bank to get your loan... Your loan records are confidential and so your credit counseling records. The counselors are not allowed to discuss their client's financial situation, and your records will be kept secure.
Can Credit Counselors answer legal questions?
No. They are only certified to give opinions on financial matters. Only attorneys can provide opinions about legal issues.
How can I receive consumer credit counseling?
You can get it at credit counseling service or agency. See what to look for, what questions to ask, etc.
With many consumer credit counseling services you can get enrolled for their services in person, by phone, by mail or online.
