Consumer Credit Counseling Services
by Eric Morris
Many credit counseling services are run as non-profit community services. Credit counseling is an intensive activity requiring certified counselors who are trained to help consumers out of debt.
Good news for consumers in need of counseling services is that these firms can provide consumer credit counseling services free of cost or at a nominal fee. Typically, the first session is free. Subsequent follow up sessions are at the nominal fee. Each customer is assigned a counselor.
Help for a consumer is offered to create a manageable financial plan. This typically means reviewing the consumer's income stream and assets, doing an analysis of debt and then creating a plan to resolve the debt in a way that the consumer can emerge debt free. When such an evaluation leads to the conclusion that debt cannot be resolved, counselors may recommend bankruptcy to the client and help them through the process.
Assuming that the debt can be resolved, the resolution plan typically has clear milestones and worksheets to monitor progress according to plan.
The service range is extended to a housing advisory service wherein a customer is educated on mortgages, post purchase counseling, and real estate equity loans. Financial education services, credit report analysis and bankruptcy counseling are some of the other areas counseling services focus on with their clients. The goal of education services is to educate consumers, thereby helping them to manage their money and credit responsibly.
Credit report analysis and management involves obtaining credit scores from the three major reporting agencies. Evaluating the credit capability of the client and in some cases, appealing to the credit agencies to remove false information or offer a explanation for a particular report. Bankruptcy counseling helps consumers with an analysis of their balance sheet and income statement. Many states require that consumers get such an evaluation prior to filing a bankruptcy with the court.
As new credit products, counseling services respond by creating specialized help for consumers. Recently many have counselors are offering help with analyzing the impact of reverse mortgages, which build up consumer debt over the initial part of their term.
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