Who Needs Credit Counseling?

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:

  • Are filing for bankruptcy. If you’re filing the Chapter 7 (complete liquidation of your debt), you will need to consult a credit counselor to make sure that can’t reasonably pay off your debt on your own. If it is ruled that you can, you may be moved to a Chapter 13, which means you will utilize credit counseling to create a debt management plan with your creditors.
  • Have a low credit score. If your FICO Score is lower than 620, it is very possible that you’ve made some errors along the way with managing your debt. Whether you’ve failed to pay credit card bills on time, or completely defaulted on a loan, you might consider credit counseling as a way to straighten out your debt and raise your score.
  • Simply know that your debt management is out of hand. If your credit score is not low yet and you are not in danger of needing bankruptcy, yet you know that your spending is a bit irresponsible, you may seek credit counseling for guidance on how to better manage your spending. However, most people use this type of counseling to get help with paying back debt that can’t manage without professional assistance.

If you don’t think you need credit counseling, you’re in good shape! But if you do, you may want to visit the U.S. Department of Justice to find an approved list of credit counseling agencies in your state.