1. Money

Finding a Credit Counseling Service

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A credit counseling service will help you work to get out of debt. This service is designed to help you resolve overwhelming credit card debt and other debt issues. The company works primarily with credit card companies and cannot help you as much if you have a large amount of different types of debt such as car debt or student loans.

When you first meet with the credit counseling service, your counselor will look over your bills, income and total amount of debt and work with you to create a plan to get out of debt. The most positive aspect of using a credit counseling service is that they help you to set up a realistic budget. This helps you find extra money to put towards your debts, and if you follow the budget you will stop overspending and using your credit cards.

Once the budget is set up you will begin making payments to the credit counseling service, which will then pass the payments onto your credit card company. Your counselor will contact each of your creditors and ask them to reduce your interest rate or payment amounts. Her job is to work out a better deal for you, while still helping the credit card companies to receive the full payment amount for the amounts you owe them. There is a set time when you have to pay a specific amount per month until all of your current credit card debt is paid off in full.

A credit counseling service should be chosen with the same care you would choose a financial advisor. The reputation of the company is important, since they will be handling a portion of your finances for a period of time. You need to choose a reliable company that has an established business history and no complaints with the Better Business Bureau. If you know friends or family members that have used a credit counseling service ask them for a recommendation.

The biggest problem with using a credit counseling service is that the companies are often unreliable. Many will disappear with no notice to customers, and the money you paid the service disappears as well. When choosing a company you want to be sure that it has been in operation for several years. A national company is more reliable than just a local one, though many of the national branches are individually owned. You should also request information concerning the payments being made and check with your credit card company to make sure everything is being paid on time.

Working with a credit counseling service does show up on your credit report, but it is much better than debt settlement where you only pay a portion of the debt or bankruptcy. It is also a better option than choosing to stop making your payments because your situation has become overwhelming. If you feel like you are in a situation that you cannot quite get a handle on this is a good option to consider. Even if you do not decide to use the service, the initial counseling session may be beneficial.

You can do all of the things a credit counseling service does on your own. It is possible to set up and follow a budget that gives you extra money to pay for debt yourself. Once you have the budget you should create a debt payment plan that shows you how to focus your money and speeds up how quickly you get out of debt. You can also contact your credit card company to negotiate a lower interest rate or to reduce your monthly payment amount. If you are working on it yourself you can also include your other forms of debt in your current plan and take care of it.

Whether or not you choose a credit counseling service, debt settlement, and bankruptcy or paying off the debt on your own, you should make a commitment to stop going into debt. This means cutting up the majority of your credit cards and closing the accounts. It also means sticking to a budget and saving for emergencies and big purchases. If you do decide on bankruptcy, take the time to find a good bankruptcy attorney.

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