What to Expect From a Credit Counseling Service

Written by , July 10, 2012

What to Expect From a Credit Counseling ServiceDespite the fact that there is so much good financial information readily available online, some people prefer to seek out one-on-one interactions for financial guidance. This desire for individualized attention can be particularly strong if someone is experiencing financial difficulties. In light of the fact that so many individuals are experiencing financial problems these days, credit counseling services have become an increasingly popular option.

While the fees charged by these services can vary widely, the process of going through credit counseling is usually quite similar across the different agencies.

If you’ve never gone through it before, here’s some information and advice on what you can expect from a credit counseling service.

  • An Analysis of Your Current Monthly Expenses. One of the first steps of any credit counseling session is likely to be an analysis of your current monthly budget and actual expenditures. In order to make this portion of your counseling session go smoothly, collect all your receipts and credit card statements for the past several months so that you have this information readily available.
  • An Analysis of Your Income. You should also be prepared to discuss all of your income sources. This will include whatever you earn from your job, of course, but also any child support payments you receive, any investment or rental property income, and any insurance or structured settlement income you may have.
  • An Analysis of Your Indebtedness. Get all the information you have regarding your indebtedness. Gather all your information regarding what you owe on your home, your car, your student loans, your credit cards, and any other indebtedness.
  • Schedule Enough Time. An initial consultation may take upwards of an hour or more, depending on your particular situation. Because the information and suggestions you get from the credit counseling service can potentially be quite important, you want to be sure that you have enough time to go through the entire counseling session, and not have to end early or rush through any of the discussion points.
  • Establishing a Debt Management Plan. The ultimate goal of a credit counseling session is often the establishment of a debt management plan. A debt management plan is a path to work out from all the debts, and sometimes involves reduced payments, fees and interest rates to the debtors.
  • A Fee Agreement. Ideally you’ll be able to have a thorough discussion about how your credit counseling service will be compensated before you begin the actual consultation. There are different ways for you to pay for credit counseling services, from a flat fee to a percentage of the amounts that will be covered by a debt management plan.
  • Credit counseling can often be a valuable service to individuals who need help paying off their debts. By knowing what to expect you can make the entire process go smoothly.

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