If you're in over your head when it comes to debt, you might want to seek some professional help. Credit counseling sounds very inviting. But what is Credit Counseling, exactly, and how does one go about getting it in a way that is actually beneficial?
- Learn what credit counseling is and isn't. In my personal attempt to relieve my own debt, I never did much research into what credit counseling was. So, after doing a preliminary internet search, I decided to consult a source familiar with having huge debt: the Federal Government. They have a website which clearly explains what credit counseling is, and, unlike some places that sound like they should be situated in a seedy strip mall somewhere, I knew the Feds weren't trying to sell me anything; they don't have to try, as I'm legally obligated to pay them once a year anyhow.
According to the Federal Government site, credit counseling ideally is just as warm and fuzzy as it sounds. Credit counselors are supposed to help you learn more about credit and debt by providing you with counseling on things like budgeting, saving, and managing debts. They talk you through things, offer you skills, and provide some free educational materials. They're supposed to offer a plethora of services, not just a "debt management plan" (you pay them to negotiate and pay your debts). That way, you're actually getting knowledge and self-help skills, and not just helping them make a profit. You're becoming empowered to get out of debt. So, if that sounds like what you want, it's time to find a good credit counselor.
- Find a good credit counselor. As the Feds instructed, you want a counseling organization that offers real services and doesn't just offer to put you on a payment plan. While some offer free educational materials, there is also sometimes a fee for the services. Places to look for credit counseling include your credit union, your bank, your church, military bases, and civic organizations. There are also credit counseling services all over the place on the internet. The Feds say in-person counseling is best, and I would agree. If the purpose is to sit down and talk about your money, your money management skills, and your future, being able to actually sit down and talk with the person would be a good thing.
As with any service, you should be able to get some free information without explanation or expense. This will allow you to check the background of their counselors and whether their services are right for you. And, of course, buyer or counsel-seeker beware and check different companies with the Better Business Bureau or another check-up agency if you have any reservations.
The Feds offer a checklist of questions to ask before you do business with a credit counselor. These include important reminders to safeguard your privacy and identity and not be fooled into thinking "non-profit" necessarily means "non-scam."
- Be open-minded. Once you settle on a good and reputable credit counselor, be open-minded to what you're going to learn. None of us like to feel like we don't know what's what with our own finances; sometimes it's difficult getting told that you've always done something the wrong way. And I know from personal experience, it's never easy to reveal what a mess you're in. Remember though, you're meeting with that counselor precisely because your situation indicates you don't know what's what with your finances, you have been doing at least a few things wrong, and you are in at least a little bit of a mess. So go to the counseling ready to get a different perspective and ready to take advice from people who are (or should be) certified in the areas in which they're counseling you. Also remember, credit counselors want to help you make the progress you want to make with your finances. Of course, if there are real reasons you don't want to stick with the counselor(s) you've chosen -- like they're shady or they're not helpful after you've given them a real shot -- it's best to find help elsewhere.
- Be honest. Trying to make a change in your finances alone or with a credit counselor means being honest -- honest about your current situation and honest about your goals. Answer the credit counselor's questions truthfully. Not doing so may affect their ability to give you the information you really want. Also, be honest if you're confused. Ask any questions you might have about things they're talking about. It doesn't help you any to sit through an hour of counseling and not understand what's going on. Remember, the goal of credit counseling is to come out more informed and more empowered to take control of your financial life. So don't leave more confused than you were when you entered.
Not everyone is a financial expert, so don't be afraid to pick the brains of people who are experts and do want to help you. Accepting help from people "in the know" can help you chart a course out of debt and toward a more financially successful future.