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Your Questions Answered: Working with Companies Providing Consumer Credit Counseling Services

Frequently Asked Consumer Credit Counseling Questions

Q: What types of consumer credit counseling services are available?

A: Trained credit counselors working for a debt relief organization can examine your financial situation and provide sound advice and solutions based on your specific needs and goals. For example, counselors can recommend how to pay off your debts with limited means, work to reach repayment agreements with creditors, and help bring your spending under control through financial education.

A credit counselor can also improve your overall financial health by telling you what bills to pay and when. This way, you’re more likely to make consistent payments, and save money over the long run by avoiding excessive interest payments on account balances.

Q: Should I be nervous about speaking with a credit counselor?

A: There’s no reason to be intimidated. When working with a reputable service provider, talking with a credit counselor should be like talking to a trusted friend or family member. A supportive professional should comfort you by revealing that you’re not alone and that you can achieve your financial goals by addressing the factors that led to your current debt position. This person should also show you how to implement strategies to improve your life.

Consumer credit counseling services are provided by well-trained counselors whom you can count on for expertise in debt relief, while being customer-focused, compassionate, and helpful. You should always feel confident in your counselor’s ability to help you manage your situation.

Q: My credit counselor suggested that I enroll in a debt consolidation program. What is that?

A: Debt consolidation programs address unsecured debt on credit card bills, as well as store cards, medical bills, certain student or personal loans, accounts in collection, etc. There are two types of plans you should know about:

  • Debt Management– With this strategy, a counselor for a debt relief organization, such as CareOne, will structure a program whereby all of your unsecured debt is consolidated into a single monthly payment. CareOne would then distribute the designated funds to each of your creditors. As you continue making timely payments, your counselor will work directly with your creditors to obtain benefits that help you pay off all of your debt over time. Depending on your situation, these benefits may include interest rate reductions and late and over-the-limit fee waivers to reduce your monthly payments. At the end of the program, your entire debt is satisfied.
  • Debt Settlement– This plan helps people who cannot afford to repay their debt in full. With debt settlement, consumers pay back a portion of their debt. Money used to settle these accounts comes from monthly deposits you make into an escrow. Your counselor will help you determine this amount based on your unique financial situation. Once the account reaches an appropriate amount, the settlement service provider approaches your creditors with an offer to settle your accounts for a portion of the amount you owe. Once a settlement offer is negotiated with your creditors, payments are made from your escrow account.

Q: I just need to dust off my financial and budgeting skills. Can consumer credit counseling services help me, too?

A: Absolutely! Beyond the above-mentioned options, reputable debt relief organizations offer free debt management tools, tips, advice, calculators, and ongoing support to not only help you get out of debt, but also change the way you think about credit and money. At CareOne, for example, you can participate in our Online Community. This is a great place to connect with other people in similar situations and find out how others are handling the day-to-day challenges of being in debt. You can also ask questions from CareOne Experts; perhaps you just need someone to reaffirm your concerns and help you gain perspective. Look for these types of services from any firm you’re considering.

Q: What consumer credit counseling services are recommended by the BBB?

A: Working with an honest consumer credit counseling service provider is important so you can protect your assets and improve your financial situation. Identifying a firm that has a solid reputation with creditors, consumers, and the Better Business Bureau (BBB) is a great place to begin your search. The BBB identifies trustworthy firms by assessing letter grades to them on a scale from A+ to F, with A+ being the best. The grading system is based on the firm’s length of time in business, its volume of reported complaints and responses to them, as well as background information on the business. To check the reputation of any consumer credit counseling service provider you’re considering, visit the BBB’s website and type in the organization’s name.

Q: What else should I consider when seeking consumer credit counseling services?

A: Any provider you’re considering should have established relationships with creditors, built through solid service, and knowledgeable, professional credit counselors. Additionally, make sure you understand the fee structure associated with the services you’ll receive. For example, request all contracts in writing and read them carefully before signing anything. Avoid unexpected surprises by requiring the provider to be upfront about any fees you should expect to pay and how long it will take to achieve your goals.

Consumer credit counseling services are easy to acquire and can set you on the path toward achieving your financial goals. However, to achieve success, you must: 1) do your homework to identify a reputable partner, 2) read the fine print on all contracts, and 3) follow your counselor’s informed recommendations. Stray from this advice and you’ll likely remain in debt. But if you can follow these guidelines, you’ll discover that with the right services and the right provider, financial stability is truly possible. 

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