Credit Debt Counseling Services

As debt is overwhelming consumers whose personal budgets are adversely affected by the economic recession, credit debt counseling services offer a beacon of hope. These programs are oftentimes provided by nonprofit organizations (underwritten by the credit card industry) to educate the participants about the inner workings of the credit industry, how to approach debt with an eye on getting rid of it in a predetermined period of time and also how to differentiate between acceptable debt and that which offers little benefit in the long run.

Not surprisingly, there are ample numbers of consumer counseling credit services that seem to have sprung up. Although most claim to have their clients’ best interests in mind, some are better than others. Recognizing a reputable credit debt counseling service relies on the presence of five features.

1. The consumer counseling credit service must assign a case worker to the client. This professional works one-on-one with the client, becomes familiar with the individual’s (or family’s) financial situation and handles all aspects of the counseling sessions. She or he becomes the client’s main go-to contact at the agency.
2. Consumer debt elimination must be the goal of reputable consumer counseling. Service providers may act as liaisons between unsecured credit grantors and the client in an effort to negotiate workable payments, eliminate late fees or penalties and also assist with credit account closures. Suspension of credit privileges and account closure is oftentimes the prerequisite to receiving the benefits of the programs.
3. In the process of renegotiating debts, the payments for the consumer actually go down on a monthly basis. During initial discussions about the counseling, credit service companies may be tempted to embellish their success rates a bit. Reputable companies refrain from painting an overly rosy picture and instead provide the clients with conservative estimates that more accurately reflect their potential savings if signing on for the programs.
4. Full disclosure of the far-reaching effects of enrolling in consumer counseling services must be made. It is not widely known that having a credit report account notation that specifies ‘re-negotiated payment’ actually damages the credit of a consumer. Of course, these adverse notations pale when compared to the damage the credit profile experiences due to non-payments, collection activities and bad debt notations.
5. Clients receive the education needed to avoid future indebtedness by understanding how to save up for major purchases and anticipate emergency spending with separately funded savings accounts set up for the purpose. Consumers also learn how to shop around for the most favorable rates when incurring desirable debt. The latter includes car and home loans.

The benefits of searching out these features when looking for counseling are well-worth the effort: the consumer makes a wise decision when getting ready to tackle credit debt. Not surprisingly, credit debt management services are sure to prominently display their main program achievements and goals on websites and in print literature.