8 Tips for Getting the Most Out of Credit Counseling Services

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Many Americans struggle with managing their finances because of the lack of education and resources available to them. Whether you want to understand your budgeting better or you want to build your credit, credit counseling services can help. There are non-profit counseling agencies that can provide assistance, but there are also highly professional for-profit agencies that can help you with everything you need.

If you’re wondering what a credit counseling service can do for you, Cash Factory USA can help you decide if working with a service is right for you. Explore some of the top counseling and management plans they have to offer.

1. General Budgeting Advice

This is one service you can expect to get for free from many credit counseling services. Typically, these sessions are about an hour long and they review all the main aspects of your financial life. Be prepared to discuss expenses, income, and financial goals. You should be as honest as possible to ensure that you get the most accurate plan and budgeting advice.

After providing general budgeting tips, the advisor may suggest that you need more detailed counseling and advice. You can also visit more than one counseling service to hear different perspectives on your specific situation.

2. Create Debt Reduction Plans

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If you’ve decided to go into more depth with your financial management plans, a credit counseling service can help you create a debt reduction plan. They will teach you all about debt consolidation and how to lower your interest rate. A counseling service can also advise you about which debts you should pay off first depending on the different interest rates, debt amounts, age of your debts, and more. Most debt reduction plans aim to help you greatly reduce any debt you have within three to five years.

3. Bankruptcy Counseling

If you’re going through a bankruptcy, there are a lot of rules and regulations to help you get the most out of the proceedings. Since bankruptcy is the legal element involved in declaring that you are unable to repay your outstanding debts, you may want someone with more experience on your side. 

Federal law also requires anyone who is contemplating filing for certain types of bankruptcy to receive counseling before and after they complete their filing. A credit counseling service can guide you through filing your bankruptcy petition, evaluation of assets, and discharging your debt. They are also in charge of teaching you how to better manage your assets in the future.

4. Reverse Mortgage Counseling

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Not many people consider reverse mortgages a viable solution to their financial needs, but those that do don’t always understand exactly what they’re getting into. These are a type of loan that allows you to access an amount equal to the unencumbered value of your property. You are still responsible for property taxes and homeowners insurance as well as repayment of the loan plus interest.

These loans can be very dangerous, as the loan balance could eventually exceed the actual value of the home. A credit counseling service can help you review the safety of your assets and the pros and cons of a reverse mortgage loan before you sign for one.

5. Housing Counseling

From budgeting to help you make rent to buying a home for the first time, credit counseling services can help you better understand the true cost of housing. There are many hidden expenses that people don’t consider until after the money is spent. Get ahead of the curve when you consult a counseling service before jumping feet first into something that could cost you more than you think.

6. Student Loan Counseling

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At this point, most people understand that student loans offer unfair terms to the young, vulnerable students attending university. With help from a credit counseling service, you can weed out the predatory loans from ones that are actually fair. They can also facilitate conversations with your loan issuers and negotiate a fair debt repayment plan to ensure you aren’t stuck paying massive interest rates and fees.

7. Credit Review

Many times, people reach out to credit counseling services after months or years of credit-damaging behavior. Missed payments on credit cards or defaulting on loans have probably led to a credit score that won’t let you buy a car or a house. Background checks come back with negative information and it can even hurt your chances of employment.

A credit review will ensure you know what exactly you’re doing wrong in order to ensure you don’t continue making the same mistakes.

8. Improve Your Credit Score

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Reviewing your credit and learning about the ways you can improve your score will help you create a solid plan for the future. Your credit counseling service will tailor its advice to the issues you, personally, are experiencing to raise your score in increments over time. This is another area where discussing debt consolidation and lowering your interest rates is important.

What to Ask Your Counselor

Deciding whether a for-profit or non-profit service is best for you will take some research. Some questions you can ask to discover which counseling service is right for you include:

  • Do you have 501(c)(3) status?
  • Are you accredited? By whom?
  • What type of training do your counselors receive?
  • What are the costs associated with your services?
  • Are your services in-person, over the phone, or online?
  • Do your services affect credit standing or tax obligations in any way?

Research the organizations near you and find a team that can help you.

More Support & Advice

At Cash Factory USA, we’re here to provide advice for all your financial hurdles. Whether you need assistance with your budget or you’re trying to improve your credit, our experts are here for you. We’re also here to help you with short-term and long-term loan options that can get you through lean times. Explore our blog today for financial advice or visit the Help Center for information about our other services.

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