Four Easy Steps of Credit Counseling

Written by admin on December 6th, 2010

Ones that find themselves buried deep in debt often question what they should do to get out. Is a debt management program the right choice, debt consolidation, bankruptcy, self-management or credit counseling? With so many solutions to choose from, credit counseling is a great first choice to make because once you speak with a creditor, they will be able to analyze your current financial situation and recommend what should be your next step. It could simply be setting up a household budget or recommending a debt management program. Regardless, you don’t have to choose anything you don’t want to but the counselor will make a recommendation that will hopefully be the best solution to getting out of debt.

One of the main goals most credit counseling company’s have is to provide relief to financially distressed individuals and families. Some credit counseling companies also provide consumers with education and personal financial management tools that will teach them how to use credit responsibly and set a pace for a financially stable and successful future which is really important especially right after eliminating your debt because you don’t want to fall back into debt.

Once you’ve established a credit counseling company you feel comfortable with whether done by research, referral, or other reasons, here are four common steps to credit counseling to expect once on the phone with a counselor.

Step 1: During your first call you should feel that you are speaking with a highly trained and certified consumer credit counselor. You should be asked a series of questions in order to identify the root cause of your financial distress. Counselors want to ensure that they have a thorough understanding of the circumstances that have caused this financial burden so that they may provide a customized counseling session that’s unique to your personal situation. The more information the better and remember all this information is kept strictly confidential.

Step 2: Next, your counselor should conduct a financial analysis usually done by completing a monthly budget. This budget will provide an insight as to exactly how much money you are spending each month versus your total monthly household income. In addition to the budgeting assistance some companies can also obtain a portion of your credit report, which is something a lot of credit counseling agencies cannot do so its important while doing research to find this out because then you don’t need as much paperwork in front of you when making the call to the counselor. It also makes it easier, if you don’t have old paperwork, because a company that has the ability to pull up a portion of your records might be able to pull up paperwork that you don’t have. By viewing our credit report the counselor can verify specific creditor information and cross reference it with your personalized monthly spending plan. With this knowledge and a comprehensive understanding of your financial situation, you and the counselor can begin to find the right solution for you.

Step 3: The third step in the counseling process is to identify the appropriate solution for your specific financial situation. It’s good to have a variety of programs intended to aid individuals in eliminating their debt and achieving a financially stable life because everyone who calls a credit counselor isn’t going to be in the same situation so it’s better to have a variety of options to choose from to cater to specific needs. Throughout your counseling session, you should be advised of the company’s many resources which, one or more should effectively provide the financial relief you need.

Step 4: Once the solution has been identified, you should feel comfortable contacting your counselor who should be there to continue educating you as well as counseling you to ensure that the solution chosen is working effectively. The counselor you speak with first, who knows you and your situation, should be considered your own personal counselor where you can call on them opposed to having to share you story with another counselor. Let your counselor be your main point of contact, if any questions or concerns arise along the way.

Now that you know the steps to credit counseling, you should feel comfortable calling upon a credit counseling company if you are having financial troubles. More than 90,000 people turn to certain credit counseling companies for a helping hand each year. If you feel you might need help, try calling on a credit counselor just for some guidance, and remember you can simply talk to a counselor for advice, you don’t need to commit to anything. Non-profit agencies are great to consider because you know they want to help you with no other intentions while on the line.

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