Your Debt Choices

Credit Counseling

Credit counseling is a free service that helps you evaluate your finances and identify debt relief programs. Our credit counselors may help you enroll in a debt management program, lowering your interest rates and monthly payment.

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What is Credit Counseling

Credit counseling is a free service that provides help with budgeting, solutions for becoming debt free and tips to successfully manage your money.

Credit counseling is offered by nonprofit agencies and is sometimes called debt counseling. It involves a 30-minute interview with a certified counselor who gathers information about your financial situation and needs to develop a plan that helps you regain control of your finances.

The goal of credit counseling is to provide a solution that helps you achieve debt relief and get on a financially healthy path.

When to Use Counseling

Some typical examples of situations when credit counseling would help include:

  • A job loss or reduction in work hours causes financial problems.
  • Your work is steady, but you’re still living paycheck-to-paycheck because you can’t create a budget or don’t have the discipline to live with one.
  • You use credit cards to pay everyday expenses like rent, utilities, food and gas because you don’t have enough cash in your wallet or money in your bank account to pay those expenses immediately.

Debt Management Plan

If you have enough income to handle your debt, a counselor may recommend a debt management plan (DMP). A debt management plan is not a loan and doesn’t reduce the amount of money you owe the credit card company.

What a debt management plan does is make it easier – and more affordable – to pay off credit card debt in 3-5 years, without having to take out a loan. Credit card companies offer reduced interest rates to people who enroll in a debt management programs in exchange for closing your credit cards and making consistent, on-time monthly payments.

1,000 mile journey begins with the first step.

Counseling First Steps

During a counseling session you’ll be provided the following:

  • Budget Review – A counselor helps you create a budget that includes personalized suggestions on cutting expenses
  • Debt Analysis – An review of the debt accounts in your credit report
  • Recommendations – An action plan with recommended debt solutions, and alternatives available to you.
  • The action plan is only a suggestion. Credit counselors give you an understanding of your financial situation and empower you to take action, if needed.

A recent study on credit counseling by researchers at Ohio State University found that those who received counseling reduced credit card debt by nearly $6,000 in the first 18 months. That’s compared to a $3,600 reduction by those who did not receive counseling. About 70% of the 12,000 participants said credit counseling improved their financial confidence.

Let us assist you in your financial freedom.

Reaching Financial Goals

Credit counseling isn’t only about offering debt-relief solutions. Certified counselors are trained to ask consumers to look past the short-term financial problems and set long-term goals that will help them avoid future problems.

Here are goals you can work toward once you have your debt under control:

  • Buying a home
  • Buying a car
  • Sending children to college
  • Funding a retirement plan
  • Establishing an emergency fund
  • Planning a vacation

These are achievable goals, if you have the right plan. Good credit counseling will help you shape that plan.

Counseling solutions beyond just credit card debt.

Home Education & Counseling

Credit counselors can provide housing counseling such as pre-purchase counseling and foreclosure prevention counseling as well as homebuyer education. Many lenders and government assistance programs require a certificate of completion from a homebuyer education course as a condition of the mortgage. These courses teach consumers about budgeting, finding a mortgage, paying taxes, home inspections and other necessary lessons in the home-buying experience.

The classes are offered by nonprofit organizations approved by the U.S. Department of Housing and Urban Development (HUD).

Understanding your debt scenario.

Debt Counseling

This is the initial credit counseling session in which a certified credit counselor collects information about your income, assets and expenses. They will then pull a copy of your credit report and review your debts with you.

Counselors make recommendations for how to reduce expenses to help you pay off your debt faster.

They may recommend a debt management program or bankruptcy, based on your income, assets and debts. Read more about what happens during a credit counseling session.

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