Credit Counselors

Legitimate credit counselors can help people in financial distress get back on their feet. However, not all credit counselors are legitimate. To be on the safe side, choose a counselor who is affiliated with the National Foundation for Credit Counseling. 

Sometimes just one session with a credit counselor can help a consumer set up a budget, understand their finances, and take charge of their spending. For others, credit counselors can set up a five-year plan for debt repayment, along with continual help and encouragement to stay on track.

It isn’t for everyone, but about 55% of those who sign up for credit counseling do follow through and become financially responsible. Many others get much-needed advice on budgeting, credit improvement and other topics.

Credit counselors also assist in housing counseling. HUD-approved housing counselors can help and advise people who are preparing to buy their first homes. They can also help and advise consumers when refinancing or attempting a loan modification.

For some, bankruptcy is a better option than credit counseling, simply because they are too far in debt to dig out. The budget that would allow them to repay the debt is simply too strict, and they can’t stay with it, especially if they have a reduction in hours at work, miss work due to illness, or have an emergency expense.

Although credit counselors may help consumers negotiate lower payments with creditors, this service should not be confused with debt settlement or debt consolidation plans.

As with anything related to credit, do your research before contacting any credit counseling service. Google the name of the company to check for consumer complaints – or consumer praise.