How Does Credit Counseling Work? Tips For Fixing Your Credit
Maybe you have found yourself overwhelmed by the pile of credit card bills sitting in front of you. It is time to learn how does credit counseling work so that you can start to save more money.
For those of us who’ve experienced an overwhelming amount of credit card debt know that this stress can be the most traumatic experience that a person can go through.
Getting in credit card debt is a slippery slope, it usually starts with one card and one buy.
But it can quickly become a sand trap.
Often the minimum payments are like placing a Band-Aid on a hemorrhaging wound.
When we find ourselves at the helm of a ship drowning in a sea of credit card debt there are useful associations which we can turn to.
And with a little due diligence preparation can help you navigate you to safe waters, and also get you on the road to financial freedom.
Credit counseling is among these organizations that fall under the “debt solutions” class.
In effect, out of all the different organizations and solutions that could assist you in time of fiscal crisis credit counseling will give you the most peace of mind.
How Does Credit Counseling Work – Background
It was initially launched in the 1950s when creditors created the National Foundation for Credit Counseling or NFCC.
According to the W. Patrick Boisclair, Chairman of the NFCC, “the NFCC originally monitored legislative and regulatory action for its retail credit members” and “also conducted public awareness campaigns on credit.”
Their mission statement reflected an objective to assist the American consumer to avoid bankruptcy and keep them educated on financial responsibility.
In 1993, another organization was established called the “Independent Consumer Credit Counseling Agencies,” or AICCCA, saying that there was a need for, “industry standards of excellence and ethical conduct. ”
In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made counseling a requirement 180 days before filing bankruptcy.
So credit counseling has been such an essential part of fiscal health when facing the possibility of bankruptcy.
In addition, there are now are roughly 300 organizations that offer credit counseling in the USA.
Prior to choosing among these organizations to aid you, let’s get a better grasp on what credit counseling is.
How can we benefit from this?
The main objective of how does credit counseling work is to educate you on credit card debt, and how you can avoid being swamped underneath a mountain of credit card debt.
Another huge part of the procedure is that the credit counselor is involved with the negotiation of better terms for your unsecured credit card debt.
Credit repair organizations do their best to help you get reduced interest rates and reduced overall debt.
However, there are no guarantees that they can clear all of your debt overnight.