Credit Counseling: What Is It and How Does It Work?
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What Is Credit Counseling?
How Does Credit Counseling Work?
Creating a realistic budget for spending and living within your means Enrolling in a debt management plan (DMP) Reducing monthly expenses Refinancing debt for a lower monthly payment or lower annual percentage rate (APR) Avoiding foreclosure Recovering from bankruptcy Building your credit
What’s the Difference Between a Credit Counselor and a Debt Settlement Agency?
Will Credit Counseling Damage Your Credit Score?
Who Needs Credit Counseling?
When to Use Credit Counseling
Creating a budget and sticking to it Guidance on how to read a credit report and dispute any errors it may contain Buying a home Making student loan payments Managing debt Taking out a reverse mortgage Refinancing a mortgage Bankruptcy Foreclosure
What Happens in a Credit Counseling Session
Who Is a Credit Counselor?
National Association of Certified Credit Counselors National Financial Educators Council National Foundation for Credit Counseling
Tips for Finding a Credit Counselor
Look for a credit counseling agency that offers a range of services, including budget counseling Ask whether counseling is in person or online, and what free educational materials they provide Inquire about any fees and get that information in writing Find out if there is a contract you will need to sign, and review the contract carefully beforehand Inquire about the counselor’s qualifications, training, and whether the counselor has legitimate credentials, such as a counseling certificate granted by the National Association of Certified Credit Counselors Before you commit to a credit counselor, schedule an initial consultation with them which, typically, should be free Make sure you will feel comfortable speaking with the counselor about your finances
Getting the Most Out of Credit Counseling Services
Are you a nonprofit or for-profit company? What services do you provide for free? What are your fees? Can I get my money back if I’m unsatisfied with your fee-based services? Are you certified by an outside organization?
Will Credit Counseling Help You to Get a Personal Loan?
Monthly income Monthly debts Credit history Credit score
3 Personal Loan Tips
Shopping around helps ensure that you’re getting the best deal you can. Lantern by SoFi makes this easy. With one online application, you can find and compare personal loan offers from multiple lenders. If the interest rates you’re being offered seem too high, try lowering the loan amount. Generally, the larger the loan, the greater the risk for lenders, who likely charge a higher interest rate for the increased risk level. Watch out for lenders who advertise “guaranteed” loans. Legitimate lenders will want to know your creditworthiness before offering a loan.
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