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How Credit Counselling Works

Credit counselling is an essential service that helps consumers manage their debts.  It assists consumers to get out of debt by negotiating with creditors to establish a repayment plan that they can afford. Credit counsellors have the expertise of knowing how much of a monthly payment you can afford, how many months it will take to repay the debt and if you are eligible for bankruptcy or not. Also, they know how to avoid getting into debt in the future.

When a creditor faces financial difficulties, the problem is they don’t know how to get it better or fix it. Now is the time for you to get a credit counsellor.

Plan A Strategy

The credit counsellor will help you understand your situation and plan a strategy for managing your debt. He will review your income, expenses, assets, and debts. The counsellor will then develop a repayment plan that balances the number of payments you can afford with the importance of paying back your debt on time.

Authority To Check Your Credit

Give your credit counsellor the authority to check all your credits. With the soft credit inquiry, it pulls out all your financial report. It enables them to have an accurate view of all your finances. These include your credit cards, loans and balance transfers.

Create A Solution

After re-assessment, the credit counsellor would suggest an ideal solution that suits your finances. He would teach you how to budget on paper or an online budgeting tool. He would advise you about how to manage unexpected expenses or an emergency.

In credit counselling,  certified counsellors help debtors with debt settlement through tools like financial education, budgeting and guidance to help them reduce and eliminate debt. The counsellor points the borrower in the right direction to find the solution that works best for whatever situation. They understand all the solutions available and they assess which one is right for your unique financial situation.

A credit counseling session is usually done over the phone, but you can also start the process online by filling out a form detailing your situation. Then, the counselor will gather the information about your financial situation. This is about your income, current debts such as mortgage or auto loan, monthly expenses, current balances on your credit cards, other obligations such as payday loans and unpaid medical bills.

For more info on credit counselling, click here.

To get a complete picture of your finances, the counselor will ask you to authorize him or her to run a credit check. He or she will review your report to see if you have collections or other items of note.

Next, they will review your options and make recommendations for debt relief. This can include balance transfers, consolidation loans, debt management programs, debt settlement, bankruptcy, and more.

The credit counsellor only recommends the best solutions for your situation. You can get an unbiased, expert opinion about what you need to do to take control of your finances via credit counselling. You can also ask questions about different solutions and learn how to minimize things like credit damage.

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