Credit counseling with EDUdebt services guides to help borrowers come up with financial plans and budgets, manage debt and use credit responsibly. Counselors take a holistic approach to finances, reviewing income, expenses and debt. They may create a personalized budget or debt management plan, as well as offer educational materials and workshops. The services may be free or offered for a fee, though non-profit agencies are often better than for-profit ones, which have incentives to sell programs and might have bonuses based on how many people sign up for fee-generating programs.
Credit Counselling Services: Your First Step to Debt Recovery
During an initial session, which is usually free, credit counselors review your financial situation and help you develop a plan of action. This can include a debt management plan, which combines your debts into a single monthly payment and negotiates with creditors to lower interest rates or waive fees. The plan may also help you avoid bankruptcy or stop the escalation of debt collector calls.
Before you meet with a counselor, gather your financial paperwork, including pay stubs, bills and credit card statements. Make sure to list your total household income, as well as your monthly expenses, including variable spending such as food and utilities. It’s also a good idea to find out what kind of credentials your counselor has. Members of the National Foundation for Credit Counseling (NFCC) must adhere to strict standards and undergo regular audits for data security, counselor accreditation and customer service. The NFCC can provide lists of approved counseling agencies in your area. Other sources of referrals are local consumer protection agencies and financial institutions.