NEW YORK, NY / ACCESSWIRE / August 5, 2024 / Credit counseling can be an excellent resource when dealing with debt. Credit counselors work with individuals to create a plan for managing and paying off all debts, including personal loans.
However, there are some pitfalls to avoid. Below are some tips for avoiding the common mistakes people make when working with a credit counselor.
What is credit counseling, and what are the pitfalls?
A credit counselor works with an individual to create a plan for managing and paying off their debts. Credit counseling can be helpful by providing support, guidance, and assistance in creating a financial plan to become debt-free.
Choosing a reputable credit counseling agency and avoiding pitfalls that can hurt the process is crucial to long-term success.
Here are three of the most common mistakes people make when it comes to credit counseling:
Waiting too long to seek help. This is often the most significant mistake people make. It is best to seek help when first feeling overwhelmed by debt, as this gives more time and options to get back on track.
Doing it alone. Navigating credit counseling alone can be challenging, as the lack of a support system may lead to feelings of isolation or overwhelm. This can make it harder to stay motivated and recognize progress. Having a support system is important when trying to get out of debt. Family and friends can help keep individuals centered and celebrate their accomplishments along the way.
Not asking questions. There may be some aspects of credit counseling that need to be clarified. It's important to ask questions to make the most of the process. Some good questions to ask a credit counselor are:
How much do services cost, and what is included in these services?
What are the counselors' qualifications and certifications?
How does the credit counseling agency ensure the privacy and confidentiality of my financial information?
What are the main issues the counselor sees in my financial habits?
What factors are negatively affecting my credit score the most?
Does the credit counseling agency provide any educational resources or workshops on financial literacy?
Does the agency recommend any tools or apps for managing finances and tracking spending?
How to find a reputable credit counseling agency
When it comes to finding a reputable credit counseling agency, there are a few things individuals should do.
Check the Better Business Bureau (BBB) website to see if the agency has any complaints registered against them.
Ask family, friends, or colleagues for recommendations.
Read through the websites of potential agencies and look for information on fees, services offered, how they work with clients and client reviews.
Find out what kind of experience the credit counselors have.
Ask counselors questions to narrow down the many options and find someone who fits your specific needs.
Bottom Line
Working with a credit counselor has some pros like receiving guidance and support in managing debts, creating a realistic plan for becoming debt-free, and potentially negotiating lower interest rates or payments with lenders.
However, some potential cons could include paying fees for the counseling services and losing control over the repayment plan created. Not all lenders may be willing to work with a credit counseling agency. It is important to thoroughly research a credit counseling agency before committing to its services.
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About OneMain Financial
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OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.
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sonakshi.murze@iquanti.com
SOURCE: OneMain Financial
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