Free Credit Counseling

Free Credit Counseling

Credit counseling is a free service that assists you in assessing your financial situation and identifying debt reduction options. ConsolidationNow’s trained credit counselors may be able to assist you in enrolling in a debt management program, which will reduce your interest rates and monthly payment.

What Is Credit Counseling and How Does It Work?

Credit counseling is a free program that assists with budgeting, debt relief, and money management advice.

Nonprofit organizations provide credit counseling, which is often known as debt counseling. It is a 30-minute consultation with a trained counselor who will collect information about your financial status and create a strategy to help you recover financial control.

A debt management program, such as ConsolidationNow Debt Solutions, may be included in the strategy to help people pay off credit card debt. Credit counseling also involves a review of your credit record to ensure that all debts are verified. You may get instructional resources to help you better understand how to handle your money.

Credit counseling aims to offer a solution to help you get out of debt and back on track financially.

It’s a free service that may be used over the phone or online. Credit counseling does not directly affect your credit score, but it may help you pay down your debt with on-time payments, which can enhance your score.

During a therapy session, you will be given the following information:

  • Budget Review — A counselor will assist you in developing a budget that includes customized recommendations for cost-cutting.
  • Debt Analysis – An examination of your credit report’s debt accounts.
  • Recommendations – An action plan including suggested debt remedies as well as other options.

The action plan is just a recommendation. Credit counselors help you understand your financial position and, if necessary, enable you to take action.

According to a recent study by Ohio State University researchers, individuals who got credit counseling decreased credit card debt by almost $6,000 in the first 18 months. Those who did not receive counseling experienced a $3,600 reduction. Credit counseling increased the financial confidence of about 70% of the 12,000 participants.

Rebecca Steele, CEO of the National Foundation for Credit Counseling (NFCC), said, “People in a crisis situation are searching for partners they can trust, and that’s what a competent credit counseling organization should offer.” “We’ll spend time with the customer looking through their income, the stability of their income, their budget requirements, and how to save money for those rainy days,” says the representative. That is the true worth of a credit counseling firm.”

Services for Credit Counseling

Nonprofit organizations provide further debt counseling services, but credit counseling begins with a question-and-answer session.

Depending on the counselor’s advice, you may choose a debt management plan, bankruptcy, or a student loan review.

Debt Counseling

This is the first credit counseling session, during which a professional credit counselor gathers data about your income, assets, and expenditures. They’ll next get a copy of your credit report and talk to you about your debts. Counselors will offer suggestions on how to cut costs to help you pay off your debt quicker. Based on your income, assets, and obligations, they may suggest a debt management program or bankruptcy. Learn more about how a credit counseling session works.

Debt Management Plan

A counselor may suggest a debt management plan if you have adequate income to pay off your debt (DMP). A debt management plan isn’t a loan, and it won’t lower the amount you owe your credit card company.

A debt management plan makes it more straightforward – and reasonable to pay off credit card debt without taking a loan in 3-5 years. Credit card issuers offer lower interest rates to individuals who participate in debt management programs in return for canceling your credit cards and making regular, on-time monthly payments.

Dropping the interest rate to 9% (sometimes even lower) lowers the consumer’s monthly payment while paying off the loan in 3-5 years.

Non-profit organizations pay for this service. There is a one-time set-up charge (typically $50, but not more than $75) and a monthly service fee of $32, which varies by state and debt. Find out more about DMP costs.

Bankruptcy Counseling

ConsolidationNow’s licensed counselors can help customers file bankruptcy with pre-filing credit counseling and pre-discharge bankruptcy education. Anyone going through bankruptcy must attend both courses. Each education course may be taken online or with a credit advisor over the phone.

Before your obligations are dismissed, you will get a certificate of completion that must be shown to the court. There is a charge, but if you can’t pay it, you can have it waived.

Housing Counseling and Education

Housing counseling, such as pre-purchase counseling and foreclosure prevention counseling, as well as homebuyer education, may be provided by credit counselors. As a requirement of the mortgage, many lenders and government aid programs demand a certificate of completion from a homebuyer education course.

Budgeting, obtaining a mortgage, paying taxes, house inspections, and other important aspects in the home-buying process are covered in these courses. The courses are taught by nonprofit groups that have received approval from the US Department of Housing and Urban Development (HUD).

Counseling for Student Loans

The federal government offers eight distinct student loan repayment programs, each with its own set of perks and restrictions. By submitting information to a trained counselor, you may get a personalized analysis of your federal student loan repayment choices via student loan counseling. A logic engine analyzes the data and then finds eligible payback alternatives, such as possible discharges, repayment plans, and rehabilitation.

When Should Debt Counseling Services Be Considered?

Credit counseling is beneficial at any point in your financial life, but it is helpful when you discover you can’t keep up with expenditures and need to decrease debt.

The following are some instances of circumstances where credit counseling may be beneficial:

  • Financial difficulties may arise as a result of a job loss or a decrease in working hours.
  • Your job is stable, yet you’re still living paycheck to paycheck because you can’t make a budget or have the discipline to stick to it.
  • Because you don’t have enough cash in your pocket or money in your bank account to pay for daily necessities like rent, electricity, food, and petrol, you utilize credit cards.
  • Spending too much money on things like eating out, entertainment, and clothes means there is never enough money left over at the end of the month to put into a savings account or an emergency fund.

Situations like these are frequent, but they may be avoided. Credit counselors are trained to deal with the problems that plague customers and can provide a list of recommendations and solutions that can improve your financial situation.

Credit Counseling to Help You Achieve Your Financial Objectives

Credit counseling is more than just a way to get out of debt. Certified counselors are taught to encourage clients to look beyond their immediate financial difficulties and establish long-term objectives that will help them avoid problems in the future.

Once you’ve gotten your debt under control, set some objectives for yourself.
  • Purchasing a house
  • Purchasing a vehicle
  • Educating youngsters and sending them to college
  • Putting money into a retirement plan
  • Putting together an emergency fund
  • Getting ready for a trip

These are attainable objectives, provided you have the proper strategy in place. Credit counseling can assist you in developing that strategy.

How to Pick the Best Credit Counseling Firm

For online credit counseling, over-the-phone, or in-person therapy, the Federal Trade Commission advises contacting nonprofit credit counseling businesses like ConsolidationNow Debt Solutions.

Most nonprofit organizations provide free credit counseling; however, the FTC website cautions that nonprofit designation does not ensure that the services will be free and recommends thorough research before selecting a credit counseling firm.

5 Qualities of a Reputable Credit Counseling Organization

1.) Nonprofit: Check the company’s website’s “About Us” section to see whether it is a 501(c)(3) nonprofit organization.

2.) Licensed and Accredited: Before enrolling in a program, be sure the organization is accredited by the Council On Accreditation (COA). The COA establishes the criteria that the credit counseling business must adhere to.

3.) Certified Counselors: Counselors should be certified by the National Foundation for Credit Counseling (NFCC). The NFCC mandates member companies to follow stringent standards and undergo frequent audits for data security, counselor certification, and results-oriented customer service.

4.) Low Complaints: Check with the state attorney general’s office or the Better Business Bureau for a list of complaints and how the agency dealt with them.

Free Financial Literacy Education: Look for a company that offers free financial literacy education to customers and the broader public.

For-Profit vs. Non-Profit Credit Counseling Services

The NFCC has certified 57 non-profit agencies. The NFCC does not recognize for-profit businesses.

Steele stated that nonprofits have an obligation to provide free credit counseling. We have the best interests of our consumers in mind, and our counselors understand social work.

It’s not about the money. Nonprofit agencies exist to help the consumer. For-profit businesses are there to make money.

Nonprofit credit counselors work under strict guidelines set by the state and organizations to ensure they act in the best interest of their clients. States often audit nonprofits to ensure they adhere to all state regulations. They also require them to demonstrate that they are acting in all clients’ best interests.

ConsolidationNow, for example, sends clients monthly newsletters that include money-saving tips as well as stories from people who have been able to get out of debt. This helps clients motivate others to do the same.

What happens during non-profit credit counseling?

A consumer credit counseling session typically takes around 30 minutes.

Sessions can be conducted online or by telephone. After providing information about your income, expenses, and debts, you will receive a customized debt relief plan.

Why choose ConsolidationNow Credit Counseling?

ConsolidationNow provides convenient online counseling. Simply enter your income, assets, and debts to receive a customized debt relief plan – all this without ever having to speak to someone. ConsolidationNow also has an A+ rating with the BBB and is certified by the NFCC.

For veterans and military personnel, debt relief

ConsolidationNow provides free, non-profit counseling for military personnel, veterans, and their families.

We understand that military personnel from all branches face unique financial difficulties due to frequent deployments, disability, and PTSD. We are here to help.

 

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