Nonprofit Credit Counseling Services
Since its opening debut in 1950, credit card debt has been an ongoing problem as consumers began going into debt at an alarming rate. Trapped into unbearable terms and fees the cycle hasn’t changed much since inception. 85% of consumers in America have a household credit debt of $8k or higher, sources say.
Dreams aren’t much different today either. Like days before, the American dream to be debt free still sleeps on as we continue creating more and more debt with little hope to an end nearing of this vicious cycle. Unlike 1950 though, there are many different options available today to consumers who are genuinely tired of economic enslavement and are ready to get out of debt and stay out. Education, patience, and a relearning of behavior are key to success once one becomes debt free, to ensure they stay debt free.
Credit counseling, created by the federal government, was implemented to provide financial counseling services and assistance to consumers interested in exploring alternatives to becoming debt free. More affordable payback plans are established that cater to the consumers ability to pay and a goal of becoming debt free in 5 years or less.
Agencies that are nonprofit, have established strong relations with creditors to provide clients lower interest reductions, lower payments, and freedom from debt in 5 years. The consensus is, a true nonprofit is geared toward assisting consumers in paying back their debt without impaling the consumer with exorbitant fees for services. Nonprofit credit counseling organizations do charge nominal fees to cover administrative costs but most of the counseling service fees are paid by the lender themselves.
A certified credit counselor working for a nonprofit credit counseling agency will first assess your situation in a free financial analysis, outlining your debt to income ratio, assets and liabilities. Once your assessment is complete the counselor can then quote an affordable monthly payback plan that coincides with the creditor guidelines for debt consolidation. As the minimum monthly payment terms are agreed upon creditors then instill program benefits such as the stopping of fees and reduction to interest to lower fixed rates- usually in the single digits. This enables the consumer to payback the debt at a reasonable rate and within a reasonable time frame.
When Do You Need Credit Counseling?
You can’t pay the minimums on your credit cards.
The interest rates are too high and balances aren’t going down.
You want to improve your credit score by lowering your outstanding balances faster.
You’re consistently late paying one or more of your regular bills.
You’re being harassed by creditors and collection calls.
Your efforts to work out reasonable repayment plans with your creditors have failed.
Your accounts have gone more than 6 months past due and legal pursuit has been executed.
Speaking with a certified credit counselor and receiving a free financial analysis of your household budget and credit debt will give you a better idea of what options are available to you that are within your fiscal means. Working with nonprofit credit counseling services can improve credit while eliminating debt in 5 years or less.