Counseling As A Way To Repair Credit

There are several ways in which people try to get out from under the weight
of debt that is keeping them down. Most people have heard about various
methods of credit card debt settlement which include debt negotiation and
settlement, and these are often confused with the term consumer debt
counseling. It is important that people understand the difference between
the terms before deciding on a course of action to settle credit card debt.
If a consumer turns to a counselor for help, that counselor is committed to
working with the individual in order to find a way to lower the monthly
payments towards outstanding debt in such a way that it is manageable.

Some people wonder at what point they should think about seeking out the
services of a credit counselor. If you find that you are being called by
bill collectors or collection agencies on a regular basis, it is probably
the right time to go out and look for a good counselor.

First, keep in mind that not all credit counseling companies are created
equal. There are hundreds of companies out there that offer these services,
and while many are legitimate, some are scams that will result in the debtor
in a deeper hole than what was there in the first place. One tell tale sign
is an offer to get rid of your debt immediately, as if by magic.
Nothing is easy, and credit management is no exception. These solutions are
simply not possible. Instead, check the company out carefully. A sign that
the company is probably right for you is if it has been accredited by the
Consumer Credit Counseling Services.

It is important after you decide on the company that best suits you that you
are absolutely honest with the counselor you are appointed. This person is
there to help you, and holding information back will impede her ability to
do her job. After you have explained your situation the counselor will begin
to put the affairs in order. The first step is talking to your creditors and
renegotiating both the payment plans and the interest rates.

Some people are familiar with the idea of debt management systems that
require a lump sum to be paid to the company, out of which the monthly
payments are made. One downside to this strategy is that even good credit
companies are subject to error from time to time, and a missed payment will
reflect on your credit in a negative manner. For this reason, many people
choose to manage their payments schedules themselves after determine the
course with their counselors.

Legitimate companies are often sponsored as non-profits by creditors, and as
such they do not charge high fees for their services. You should beware of
companies that do ask for a large amount up front as the odds are good that
they area scam; avoid these and look for a different company.

You should also know that using a credit counselor may put a black mark on
your credit record, as it indicates that you have overstepped you means and
are in financial trouble. In the long term, though, it would probably be
more damaging to not make any changes at all and try to clear yourself all
on your own.
After all, this is how the debt was accumulated in the first place.

About The Author: Charles Parson regularly creates summaries on topics
relating to consumer counceling and settle debt. You can learn about his
writings over at http://www.creditenio.com/ccsettlement.html and different
sources for credit card debt settlement knowledge.