Consumer Credit Counseling Service

Consumer Credit Counseling Service

Legitimate consumer credit counseling services are not easy to find, as many of them have come under public wrath of late. A common criticism about credit counseling is that participating in such a plan ruins a consumer’s credit which also has led to charges that credit counseling is a marketing gimmick the lending industry makes use of. Probably it is for this reason the experts opine that credit counseling is ineffective. But one must not forget that credit counseling is not the same as debt consolidation.

In the forefront is the Christian credit counseling which is making a difference in this field not just by demonstrating genuine intentions but also by offering credit counseling in an affordable way to consumers. It helps consumers take steps to improve their credit.

A consumer credit counseling service has the goal educating debtors of different consolidation ways. Of which the secured debt credit is the one with which you can avoid unnecessary additional clerical costs and also prevent legal actions against you. In short credit counseling is designed to persons who are neck deep in debt.

The Statutory Bindings

If you are looking for information on nonprofit credit counseling agency Christian credit counseling is your natural first choice. Like all nonprofit organizations they have an obligation to educate and counsel the needy people. All nonprofit credit counseling agencies are bound by nonprofit corporation statutes and comply with state charitable solicitation laws. This is why nonprofit credit counseling agencies provide free services or at least charge minimal fees to recover their cost. It helps to keep in mind that appropriate Federal and Senate committees have taken cognizance of the profitable nature of some of the nonprofit credit counseling agencies.

In fact, for more than five decades now, nonprofit credit counseling organizations are helping consumers. Those providing assistance to consumers credit counseling and debt management services must keep your private information confidential. Rules are put in place to limit the fees a nonprofit credit counseling firm charge their clients. Californian licensed nonprofit credit counseling firms must file their financials with the statutory agencies regularly.

However, some community credit counseling services are setting precedence and are taking their services beyond expectations. If you act sensibly you can actually get free counseling and debt consolidation advice from them.

Here Are Some Helpful Steps

List out all community based and nonprofit credit counseling services.
Checkout their accreditations and business histories through their websites and testimonials.
Talk to them before signing any documents.
Don’t leave anything to ambiguity; get their and your obligations in writing.
Take help from The National Foundation for Credit Counseling for researching about some credit counseling organization.
You must always remember, at the back of your mind that, credit counseling is a legal and ethical alternative to file bankruptcy. In any case, credit counseling is a viable option before meeting a bankruptcy attorney. For an industry having more than its share of questionable reputation, at least this is the only way out. In addition, for those consumer credit counseling agencies in the for-profit side of the industry, the problem is that the fees are rather too high and typically take long tim

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Is a Consumer Credit Counseling Right For You?

Your credit history will determine your credit worthiness and the interest rate you will pay when you apply for credit. That’s why it is important to maintain good credit with your best effort, but unfortunately sometime it is out of our control and we are forced to live in bad credit situation. As a result, an increasing number of people are getting help from consumer credit counseling agencies to resolve their debt issues. However, consumer credit counseling may not be the best option for everyone. Then, how do you know that getting assistance from consumer credit counseling is right for you?

There are many types of debt relief solutions that you can use to reduce and resolve your debt problem. Among the common one is consumer credit counseling which involve financial education offered mostly by non-profit organizations to get people out of debt. Beside the advices and education courses on money management, consumer credit counseling often tight with the aid of a debt repayment plan that requires you to make a monthly deposit to the credit counseling agency, which will then pay off to your creditors according to a payment schedule set by your credit counselor. Overall, it is a good option to approach a consumer credit counseling agency, but it has some limitations that you have to know before your select consumer credit counseling as your debt relief option.

Credit Counseling Limitations

1. No All Debts Are Included

Consumer credit counseling does not deal with all types of debts. There may be some debts that are unable to place into your debt repayment plan, which include:

Secured debts such as mortgages and car loan.
Current bills for utilities.
If your debt problem is caused by those debts above, then credit counseling services can’t really help you.

2. Can’t Help To Reduce Debt Principal

Credit counseling services can’t help you to reduce the amount of debt principal you owe. You need to go for a debt negotiation or debt settlement services if you look for the potential reduction of the amount of your debt principal. What the credit counselor may help are:

Reduce or waive your interest rate agreed by creditors.
Reduce your monthly payment by prolong the debt repayment period so that the amount used to pay your monthly debt is within your financial capability.
3. Can’t Freeze or Protect Your Credit Rating
Consumer credit counselors will not report their client participation in their debt management program to credit bureaus. However, it may be reported by the creditors which will cause negative impacts to your credit report. If you choose to participate into the debt management plan offered by consumer credit counseling, you should maintain your obligation to reduce the negative impacts to your credit report because the creditors may re-age your account and set the status to current in your credit report.


Credit counseling service can provides a solution for debtors to get out of debt, but it may not the best option for everyone. You should understand the limitations of consumer credit counseling before you choose it to be your debt relief solution.

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