Lesson D: Credit Counseling

Credit Counseling Services

Certified Credit Counselors review your current financial situation.
They implement strategies to assist consumers in the problem solving process. Analyzing your budget and spending patterns is an essential step to financial success. Credit Counselors are well versed in this area. They are very helpful at identifying way to better manage your personal finances.

If you and your counselor determine that there isn’t enough money for you to make minimum payments, they can contact your creditors to negotiate lower payment terms and interest rates. Many creditors agree to the terms and place the consumer on a plan that will eliminate the debt over a certain period of time. This is commonly referred to as a debt management plan. Some creditors prefer to work with credit counseling agencies directly because credit counselors address problems with all creditors as opposed to just one in particular.

Once a payment plan has been established between you, your credit counseling agency, and your creditors, you will make your payments to the agency and payments are disbursed to your creditors. Generally, your creditors will not contact you while you are paying as agreed through the plan.