What is a credit counselor?
A credit counselor is an employee or volunteer of a non-profit organization that assists people with budgeting, debt settlements and financial recovery. They play these roles in unique fashion since they are not seeking to profit from your financial distress. Often, individual find great relief in using their partnership to move towards freedom from debt.
Acting As An Accountability Partner
The first step for a credit counselor is to assist an individual with creating and sticking to a new budget that suits both their desired lifestyle and the need to reduce debts over time. They may not be by your side with every decision, but they do set a foundation to assist people with meeting or exceeding personal financial goals. By setting goals with a credit counselor, debtors find that their success in paying off loans and credit cards is increased dramatically. Each credit counselor spends ample time going into enough detail about a person’s budget that there is little that will slip through the cracks.
Assuming The Role Of Teacher
Along with setting a budget, is the lesson in adjusting one’s lifestyle to account for the unexpected while making room for the necessary expenditures. Credit counselors offer their expertise in defining detailed budgets and advanced directives towards what to expect in the coming months and years of living on a budget. They not only educate people in the moment, but prepare them for the future of budgeted living. More importantly, their advice and guidance can keep one out of more dire circumstances, such as having to file bankruptcy.
Managing The Debt Settlement
Credit counseling agencies act as intermediaries in the debt settlement process and can often act as a negotiator with creditors. They also manage the payments made in a debt settlement process to ensure clients are adhering to their commitment. Fortunately, with the other roles they play, one can be certain that flexibility is still a key part of their approach. Since people are not dealing with creditors directly, a person can adjust their approach to reflect sudden life changes, such as job loss.
Offering Consumer Credit Advice
Credit counselors are also experts in the field of consumer credit. They understand both the options and downfalls of many different approaches to managing and repaying debt that takes a critical eye to the overall process between creditor and debtor. By having the understanding of both sides of the coin, credit counselors can effectively negotiate, offer advice, and teach about key principles that govern the debt management and budgeting processes.
In the end, credit counseling is a viable solution to debt management, financial education and credit advisement. Since most are non-profits, a person can feel confident that they are objective participants in the process and actually care about the well-being of every individual or family that comes to them for help.