What is Credit Counselling?
O.k, so we know it exists, but just What is credit counselling?
Essentially, this is a process that aims to educate consumers about debt - and helps them get out of it. Credit counselling starts with establishing your financial status, followed by designing a debt management plan custom tailored for you. Some credit counselling agencies even include services such as budgeting, retirement planning, and savings.
Reviewing your financial status
First things first. A credit counsellor will review your financial status by looking into your income, expenses, assets, net income, and debt. Based on your financial status, the counsellor will advise you on how to properly manage your debts.
Creating a debt management plan
A debt management plan will be designed specifically for you. The credit counsellor will help you in consolidating your debts and in requesting discounted settlements from your creditors. Once the plan is made, this will be given to your creditors for their approval. Now (and here's the tricky part) all you have to do is to follow the debt management plan.
If you get into more financial problems, you must immediately inform the credit counsellor about it. He or she can further help you by making a new debt management plan or putting your plan on hold. If your plan is put on hold, the counselor will advise your creditors about it.
Tips on choosing a credit counseling agency
According to the Financial Consumer Agency of Canada, it is best to look into an agency’s background before entering an agreement. See if the agency is accredited and if the counselors are certified and well trained. You must also compare their fees and services. Some agencies offer free budget services. Also check if the agency has client complaints in the past.
Now, you know what credit counseling is and how to find the right agency. If you are deep in debt and do not know where and how to start, look for a credit counselling agency that can help you.
Your Credit Score
Your Credit Score is the single most important factor any Creditor will look at when deciding on whether or not to provide you with anything from a small personal loan on up to a Mortgage.
Video Tips
Steve Ely, President of Equifax Personal Solutions gives a Frank and Honest assesment of what you can do to Protect and Improve your Credit Score
Comments
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