If you are in trouble financially, you have probably heard theterm “credit counseling,” but do you understand what it is?Oftentimes this term is used in the same sentence as debtnegotiation or debt settlement, but actually, it’s a completelydifferent process. With credit counseling, you will actuallywork with a credit counselor to pay off your debt in smaller,monthly lump sum payments that you can afford.

The people most likely to need credit counseling are those whoare receiving troubling phone calls from bill collectors, orwhose accounts have gone to collection agencies. If you thinkthat you may benefit from using a service like this, please readthe following outline of the best way to work with a creditcounseling service.

First, you’ll need to be able to identify a good creditcounseling service, and not fall victim to one of the many scamsthat are out there. Start by avoiding any ads that promise youquick fixes for your credit report-quite simply, there is nosuch thing. Instead, look for a reliable company accredited byConsumer Credit Counseling Services.

Next, you’ll have to meet with your credit counselor, andprovide them with all of the details of your debt. Don’t betempted to leave anything out because he or she will need thatinformation in order to create a workable re-payment schedulefor you.

Now, you’ll get to sit back and allow the credit counselor towork for you. They will contact all of your lenders and informthem that you are trying to create a plan that will allow youpay off your debts. They will work with them all and coordinatea re-payment schedule that you can live with. Oftentimes, theywill be able to lower your interest rates in order to allow forlower payments.

Some credit counseling services offer a debt management system.What is it? Instead of having to keep up with all of thepayments yourself, you will have the option of submitting onelump sum payment to the credit counseling service and they willdo it for you. One note of caution here: there have beeninstances of a credit counseling services missing their client’spayments, and if that happens, your credit report will sufferfor it. Knowing that, be sure to check out the companythoroughly before signing up for their debt management program.

What will you pay for all of these services? A reputable companywill only charge you a small fee, somewhere around fourteendollars per month. That’s another way to know if you are dealingwith a scam operation—if they want a lot of money up front, it’salmost a guarantee that they don’t have your best interests atheart.

You should be aware that working with a credit counselingservice can do some damage to your credit report. However, formost people who are at the stage in their financial lives whowould even consider such a move, would most likely benefit fromit. After all, it’s much easier to explain away an honestattempt to get your finances in order than it is to explain abankruptcy or a report full of charge-offs.

About the author:This article provide courtesy of http://www.debt-ender.net