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Credit Counselors

Find a credit and debt counseling company in the United States.

Behind on your credit card payments? Consumer credit counseling might be a viable solution for you. With consumer credit counseling, you work with a counselor to decide how much you can afford to pay on your credit card bills each month. Your counselor then works with your creditors to work out a debt management plan that fits with your ability to pay. This new payment schedule often includes a lower interest rate, thus lowering your minimum monthly payment.

Being under a debt management plan makes your credit card payments easier to manage. In most cases, your payments will be sent to your credit counselor rather than to each of your creditors. Your credit counselor is responsible for distributing your payments to your creditors each month. Even when you're on a debt management plan, it is wise to monitor your credit card accounts to be sure that your payments are being applied.

One thing to watch out for with credit counseling is the way your credit accounts are reported on your credit report. Even though you're making your payments on time each month, you aren't necessarily paying as you originally agreed. Doing this can negatively impact your credit score. Not only that, some creditors include remarks on your credit report that indicate you are under a debt management program.

The effects of credit counseling, though not as severe, are comparable to that of bankruptcy. You may find it difficult to obtain new credit as long as you are on a debt management plan or even for a few years after while you solidify your repayment history.

Be advised that as long as you are on a debt management program you will not be able to use your credit cards. You might also find it difficult, or even impossible, to obtain new credit during that time. The inability to use credit isn't such a bad thing, though. It's easier to pull yourself out of debt when you aren't constantly renewing the debt. Use the break from credit cards to learn better money management so that once you start using credit again you'll have the habits that keep you out of debt.

Even though credit counseling has some disadvantages, that doesn't disqualify it as an option for relieving pressure from debt. If you are having trouble managing your credit card payments and you are in danger of falling behind on your payments, or even already behind, then credit counseling can keep your credit score from being too severely damaged.

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