Credit counseling agencies help you to manage your finances effectively. With the help of certified counselors, you can fix your credit report and erase negative elements listed on it. Your credit report contains information about all your debts including your past payment history, outstanding debts and also mentions whether or not you have filed for a bankruptcy. Creditors analyze this report to assess the level of risk they take by lending you money. Credit counseling agencies negotiate with your creditors and credit bureaus to eliminate negative listings on your report.
When you should go for counseling?
You must enroll for a credit counseling service in the following circumstances:
- You have been denied a loan: If you have been denied a loan or a credit card recently, you can enroll in a counseling service. The creditor provides you with a report mentioning the reasons for not offering the loan. The counselors of the agency analyze this report and provide you with a personalized solution.
- You are not getting rent: If you have negative items on your credit report, landlords may not let you properties on rent. The agency can help you fix your report and improve your credit score.
- You are being harassed by creditor’s calls: If you are unable to make minimum monthly debt payments on time, creditors will start calling you repetitively and pressurize you for payments. In such a situation, the credit counseling agency can help you by devising a debt management plan.
- You are not offered low interest credit cards: You do not get a credit card at a favorable rate of interest if there are negative items (such as late payments and charge offs) on your credit report. Counselors assist in cleaning your report and help you get a credit card at a lower interest rate.
Negative items like late payments, judgments, collections and tax liens on your report lowers your credit score. A low credit score will not make you eligible to get favorable interest rate and terms on automobile and mortgage loans. There are many ways to increase credit score. Credit counseling agencies not only help you improve your score but may also provide you with suggestions to restore your credit. Which definitely would relieve you?
Some of them provide a repayment plan with your creditors, department stores, visa, Master card, medical and professional bills, banks, etc. And often creditors are not too strict. So there can be cases found (in almost all cases) where your creditors will help you by accepting a win-win situation. They can even abandon late charges and or service charges. And if you are lucky enough, you may get even reduced interest charges.