What is credit counseling?
A credit counseling program offers you the tools and education to help you become debt free. You will consult with a debt advisor and receive education that will help you manage your finances more effectively.
Credit counseling will also help you pay off your debts through a Debt Management Plan (DMP), which will reduce your interest rates, consolidate your debt into a single monthly payment, and stop over-limit and late fees.
By taking advantage of these services you will become debt-free in about one third the normal time, and you will have learned the skills that will help to keep you on the right track financially in the future.
How does credit counseling work?
Credit counseling is one of the most effective solutions available for crippling unsecured debt problems. A debt advisor will first begin by assessing your current financial situation.
They will conduct a detailed review of your income, expenses and debt (both secured and unsecured) to establish your financial hardship. Based on this, you will receive a customized debt solution that is the most appropriate for you.
Your debt advisor will formulate a budget of your living expenses and a payment plan for your debts. If you decide to enroll in a Debt Management Plan (DMP), many creditors will reduce your interest rates and stop charging over-limit and late fees based on your financial hardship. With these lower interest rates and a consolidated monthly payment, you will be on track to become debt-free in 60 months or less. You will continue to receive your monthly statements from your creditors, and you’ll begin to notice your balances decreasing significantly.
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Benefits of Credit Counseling |
|
|---|---|
| Reduce your interest rates | Make one consolidated payment |
| Become debt-free | Protect your credit score |
| Get relief from collection calls | Stop late and over-limit fees |
| Receive financial counseling | Avoid bankruptcy |
How do I qualify for credit counseling?
In order to qualify for a Credit Counseling Program:
- You must have at least $3,000 in total eligible unsecured debt.
- No minimum number of accounts is required. You can qualify even if you have only one account.
- Your accounts can be current or late.
Eligible Debt for Credit Counseling |
Ineligible Debt for Credit Counseling |
|---|---|
| Credit cards | Mortgages |
| Gas cards | Student loans |
| Collection accounts | Auto loans |
| Some credit union cards | Medical (not financed) |
| Personal/Signature loans | |
| Medical (financed) | |
| Department store cards |
To determine full eligibility, start by filling out the online form, and a debt advisor will determine the best solution to relieve your debt problem.
Credit Counseling Education
For additional information, please read these helpful credit counseling and debt management articles:
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