Credit Counseling

Credit counseling is a service whereby a debt repayment plan is worked out with your creditors by a credit counselor and you make monthly payments until your debts are paid off.

Because credit counseling can take anywhere from 3 to 7 years to complete, it is one of the slowest forms of debt relief. It is important to note that using a credit counseling service may result in a provision on your credit that will prevent you from being granted any type of credit for the entire time you are paying off your debts.

Additionally, the fact that you used a credit counselor will be noted on your credit report and will likely have an effect on the decisions lenders make about you in the present and future.

Who Should Use Credit Counseling?
Credit counseling services work best for people who will be able to make a payment on their credit card every month without using them. If you cannot afford this, credit counseling will not be of much use to you.

It can be helpful to think of credit counselors like personal trainers. They may be able to show you what to do and how to do it, but in the end it is all about what you do, and the same results can be achieved without them.

When considering credit counseling, always keep in mind that these are services that are paid by the creditors to which you owe money. Their first priority will always be to the creditor, regardless of what their advertising may imply.