Credit and Debt Counseling, the Good, the Bad and the Ugly

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Credit and debt counseling is crucial to the financial health but not many will avail themselves of this opportunity not because they do not want it but usually it is due to lack of information on what to expect on such a session. There is nothing to be wary about because you will get the information right here, right now.

First, the credit and debt counseling session is confidential. During the session, the counselors will review your financial situation. They will then work with you to specify the strategies that will help you go forward in your quest for better financial health. In order to do this, they will have to study in details your income, expenses and debt. Then together they and you will map out a plan of action to reduce and avoid debt.


The counselors will also advice you on how to create and balance a budget. In addition, they will give advice on the wise use of credit, money management and building a savings plan so you can do more with what you have. Here are the steps you and your counselors will complete during the session.

  • 1. Gather all the income amounts and personal information and have them verified.
  • 2. Review all the expenses and discuss recommendations on expenditures.
  • 3. Find out if income will cover all the expenses.
  • 4. Check out all assets and liabilities.
  • 5. Gather all debt statements.
  • 6. Determine the options to take, based on the information gathered.
  • 7. Create a budget and an action plan.

Now that you know what to expect during a credit and debt counseling session, let us see how we can find a good credit counseling agency. Some are worried that if the credit counseling service will help them lower the interest, the credit will be hurt. The fact is that a good credit counseling service will not hurt your credit.

By the time you will be with a credit counseling service, you have more than likely hurt your credit. That is not to say, a poorly run scam agency will not result in poor rating. What will hurt your credit is if you send money to a bad agency to forward to the creditors but the agency may not send it on time or worse may not send it at all.

That is why you have to be careful in finding the right and legitimate company who will help you negotiate with the creditors to lower your interest rates and reduce the amount of fees. Mind you, even this may not happen at all. Even with a good company, there is no guarantee the interest rates will be lowered and the fees reduced.

When you are already having a tough time making both ends meet, the worst thing that could happen is to sign up with a bad agency. Since this is getting too long, I will give you the details on how to select a good company on the next page so you will have all what you need before signing up for credit and debt counseling.

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