Can Credit Counseling Really Help?
By Dave Robinson, Thu Dec 8th

If you have high debt, and are in trouble, you have probablyheard the term "credit counseling," but do you understand whatit 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 professional credit counselor to pay off your debtin lower, monthly 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 readon to find out the best way to work with a credit counselingcompany.

First, you'll need to be able to find a good credit counselingcompany, and not fall victim to one of the many creditcounseling scams that are out there. Start by avoiding any adsthat promise you quick fixes for your credit report. There is nosuch thing. Instead, look for a reliable company that isaccredited by Consumer Credit Counseling Services.

Next, you'll have to meet with a professional credit counselor,and provide them with all of the details of your debt. Don't betempted to leave anything out because they will need theinformation in order to create a re-payment plan made just foryou.

Now, you can sit back and allow your professional creditcounselor to work for you. They will contact all of yourcreditors and inform them that you are trying to create a planthat will allow you pay off your debts. They will work with themall and coordinate a re-payment schedule that you can live with.Many times, they will be able to lower your interest rates inorder to allow for lower 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 paying their client'spayments late, and if that happens, your credit report willsuffer for it. Knowing that, be sure to check out the companythoroughly, by checking references, before signing up for theirdebt management program.

What will you pay for all of these services? A reputable CreditCounseling Service will only charge you a small fee, somewherearound fourteen dollars per month. If they are asking for alotof money up front, they may not have your best intests at heart.Be on the look out for potenial scams.

You should also be aware that working with a credit counselingservice can do some damage to your credit report. However, thegood does out weigh the bad. After all, it's much easier toexplain an honest attempt to get your finances in order than itis to explain a bankruptcy or a credit report full ofcharge-offs.

About the author:If you would like to get more credit information you can visitour website which contains many credit resources.http://www.my-credit-report.info This article is copyright 2005,but can be freely reprinted, as long as no changes are made,including hyperlinks.