CREDIT COUNSELING

By Casey Bond

This is the fourth installment of our financial myth-busting series. Today, we will be targeting typical misconceptions about credit. Be sure to check out the rest of the series.

Finance is a topic that the average American doesn’t know a whole lot about. Sure many of us can create a simple budget or open a savings account, but when it comes to debt management or retirement planning, we’d probably be better off consulting a professional.

Unfortunately, the services offered by financial professionals don’t come cheap. A financial advisor or tax expert can charge several hundred dollars per hour. So what do you do when you need expert advice but can’t afford much more than a Google search? Here are a few ways you can get answers from a qualified person without going broke in the process:

By Casey Bond

By now, you’re probably well aware of how important your credit score is to your financial well-being and you do your best to carefully dodge all the potential threats to that precious number. Late payments, hard credit inquiries–you avoid them like the plague. It can be exhausting keeping up with it all, so is there anything at all that doesn’t affect your credit score or is every detail of your financial life fated to influence your credit in some way?

Once you find yourself in debt, it may feel like there are no possibilities of fixing your situation. However, there are ways to eliminate your debt without having to opt for bankruptcy. Some options may take months, while others may take years. But you can pay down and eventually pay off your debt if you really try.

The following three steps can help you get out of debt:

You may be on the fast track to debt hell and are looking for a way out, which is why credit counseling is now on your mind. This is definitely not a bad route to take if you think that you have little-to-no control over your ability to manage your debt. Many people who file for bankruptcy are required to seek counseling before they can get approved for a Chapter 7 or Chapter 13. On the other hand, taking the steps to get on track on your own is even better.

If you don’t already know what credit counseling is, lets start by understanding what it is…

Though you may be thousands of dollars in debt, are on the verge of losing your car, and can barely pay your bills; when someone suggests credit counseling as a way to straighten out your situation, do you say “No, not me!?” If that is you, you may be in denial. Of course, not everyone needs credit counseling services, but more people need it than are actually admitting. So how do you know if you’re one of those people in denial? Take a look  at this quick list…

You Know You Need Credit Counseling If You:

You may be eager to get your debt under control by working with a credit counseling service, but before you venture out to get help with any company it’s important to learn some credit counseling facts. If you are already in a bad situation with collectors and certainly don’t want to dig yourself into a deeper hole than you already are (because you could get wrong informed about what credit counseling services can do for you), then take a moment to learn some of the credit counseling facts before you pick up the phone and make any calls.

Consider the following before you proceed with a credit counseling service:

In a tough economy, it’s not difficult to find yourself in trouble credit wise, which is why many individuals have found their way to credit counseling. The is a strong misconception that everyone in need of counseling has made a series of irresponsible choices to get them there. While this is true of many, it’s not the case for everyone. But no matter why you may need help, it’s good to understand more about credit counseling and in relation to a consumer.

When You Might Need Credit Counseling

If you feel like you’re in over your head financially, don’t jump to claiming bankruptcy yet.

Credit counseling can be a good choice before you take the drastic step of declaring yourself bankrupt and possibly damaging your credit further for years. Credit counseling can help you get back on your feet financially and set you up with good money habits for the rest of your life.

Why Not Bankruptcy?

Phone calls from strangers frighten you because you suspect it could be a debt collector. Your financial arsenal is loaded with a frightening large assortment of credit card bills and other assorted payments that are past due. The stress from this situation is wreaking havoc on your health, so breath deep and make that first phone call to a non-profit debt solution company.

A non-profit debt solution company should be the first line of defense for those individuals who are drowning in debt. A non-profit organization is legally established to fight for private or public interest without focusing on monetary profits. Non-profit debt solution companies help those in need organize their financial obligations, and although their goal is not to profit from consumers’ call for financial help, there may be fees involved as there are costs for operating the organization.