Who Are Consumer Credit Counseling Services?

July 28, 2015

Dear Cathy:

My husband and I recently got married.  Are there any agencies that can help counsel my husband and me on our credit?  Need Credit Counseling Help, Oklahoma

Dear Need Credit Counseling Help:

The National Foundation for Credit Counseling (NFCC) (NFCC.org) (800-388-2227) -- along with many others is known as Consumer Credit Counseling Services. There are a ton of these counseling services that have sprung up due to this recession. So be careful.

Consumer Credit Counseling Services or other counseling agencies should be contacted as soon as you find yourself being overextended.  Most of these agencies are government-run and you can find them in the government section of your phone book.

If you are under pressure from creditors, a counseling service counselor can negotiate with your creditors to repay your debts through a financial management plan.  It allows you to lower your credit card interest rates to zero in some cases and cut your monthly payments without filing for bankruptcy.

Sometimes creditors will agree to reduce payments, lower or drop interest and finance charges, and waive late fees.  If you are accepted in this program, you make one monthly payment to these counseling agencies. They distribute the agreed-upon amounts to your various creditors for a small fee.

Many people recommend this option, however, be aware that if you use this service, it shows up on your credit report and can be viewed as a red flag to future lenders. Many people who go to these counseling agencies are able to get their bills together without utilizing any more help from these counseling agencies simply because they learn to get organized.