The average U.S. family has over $6,200 worth of credit card debt. A lot of people rely on their credit cards to make ends meet and find it difficult to meet their monthly payments. This leads to a snowball effect where the monthly payments increase.
If you’re in a similar situation, don’t panic. Consumer credit counseling can provide a solution for this type of problem along with many others. Keep reading to learn about the top ten benefits of consumer credit counseling and how it may be able to help you.
1. Increase or Maintain Your Credit Score
Having a good credit score is key to getting loans with a 0 percent interest rate. But people with high debt often have low credit scores. A consumer credit service helps people who are lagging behind in their payments build up their credit scores.
Even if you’re not struggling with debt, you may be looking to increase your credit score. If you’re trying to get a loan for something like a house or a car, having a high credit score matters. Consumer credit services can help people in this situation as well. The service will also help people maintain their healthy credit score once it’s been built up.
2. Manageable Repayment Plans
One of the major benefits of consumer credit counseling is that the counselor will make a debt management plan for their clients. A debt management plan is a structured plan to pay off specific types of debt. These types of debt include credit cards, medical bills, and personal loans or lines of credit.
Debt management plans provide clients with easier payback amounts and a reduction of payments. These plans typically allow three to five years to pay back the debts included in the plan.
3. Decrease in Interest Fees
By enrolling in consumer credit services, your creditors will likely offer certain benefits to help you get out of debt faster. One of the biggest benefits creditors will typically extend is a reduction in credit card interest rates.
A decrease in interest fees helps reduce the total amount of debt. These interest rate reductions can help clients start saving money or applying the savings to other debts.
4. Convert Bills into One Payment
People in debt can get easily overwhelmed when trying to keep track of all their monthly payments. When you enroll in credit counseling, you’ll just be making a single monthly payment to the credit agency you’ve chosen.
Your credit counselor will disburse payments to your creditors as outlined in your debt management plan. Using credit counseling services is a great way to boost confidence that all your debts are being paid appropriately.
5. Avoid Creditors’ Harassment
Are you wondering how to avoid constant harassment from debt collection agencies? Well, consumer credit counseling may be your answer. A counseling agency will directly deal with the debt collection agencies, meaning you won’t have to. Once you commit to working with a credit counselor, you won’t have to worry about collection agencies contacting you.
6. Get New Credit
Another reason to opt for credit counseling services is if an application you submitted for new credit has been denied. A credit counselor can negotiate with the lenders on your behalf to get your application approved.
7. Learn Better Financial Management
Perhaps you don’t need help with debt relief but are looking for help with budgeting and financial stability. A consumer credit counseling organization can help you with that.
These organizations offer support to teach you how to avoid financial hardship in the future and plan for long-term stability. The idea is for you to become a better money manager so you can stay out of debt long-term.
8. Different Ways to Engage
Before you choose a credit counseling agency, you can choose how you prefer to receive services. The three main options are over the phone, in-person, or online. Once you have chosen your preferred engagement model, you can find a counselor that best suits your needs and lifestyle.
9. Save Time and Worry
Enrolling in a debt management program may help you save time by paying back your debts faster. By using a consumer credit counselor, you’ll decrease interest fees which will help you pay back the actual debts you owe faster.
With a consumer credit counselor, you’ll get yourself out of debt faster and will be confident about the timeframe it’ll take you to pay back your debt. There will be no need to worry about when you’ll be out of debt because your payback plan will be clearly outlined for you. Your counselor will be there every step of the way to make sure your payment schedule is adhered to.
10. Personalized Solutions
Oftentimes, when a person gets into debt, they don’t know what solutions are available to them. Credit counselors know about all the solutions available and are able to apply the right one to your unique situation.
First, they’ll take a look at your consumer credit report and other financial documents. Then the counselor will work with you to find the right solution for your specific financial situation.
Ready to Try Consumer Credit Counseling?
Now that you know all the benefits consumer credit counseling provides, are you ready to give it a try? From boosting your credit score to offering personalized solutions, credit counseling can help in all types of situations.
If you’re looking for help understanding and managing your consumer credit information, Joe Chavarria is here to help! Contact Joe today to get on the path to financial stability.