How does credit counseling work? If you struggle with debt, you may have asked this question. There’s a lot of confusing information out there about how to handle your debt and what options are available to help you break free. Credit counseling is one of many options available, but how do you know whether or not it will be useful for your particular situation?

What is Credit Counseling?

We’ve put together a short guide to help you better understand how credit counseling works, and determine if it may be the right choice for you. Once you understand exactly what credit counseling is and what it involves, it is easier for you to make a choice.

What does credit counseling do?

In a nutshell, credit counseling is an educational process that allows a consumer struggling with debt to learn how to eliminate it and how to prevent the debt cycle from repeating. You can engage in the process several different ways, but typically it is done either by phone, in person, or online.

While engaging with the process, it’s important to take advantage of the educational support offered to learn how to handle your debt. To better undestand how credit counseling works and what information you will need to provide, here’s a guide that covers what to expect on your first call.

What should you expect from a credit counseling session?

When you speak to a counselor for a free consultation, they will be gathering several important pieces of information to make the right recommendation for your debt situation. They will work with you to create a budget that takes into account all of your income, expenses, and debt obligations. Once they have a full understanding of your finances, they will help you determine the best choice to help you get out of debt.

One option they may recommend is enrolling in a Debt Management Plan (DMP). In a DMP you make one monthly payment to the counseling agency and they disperse payments to each of your enrolled creditors after negotiating on your behalf for benefits such as reduced interest rates, lower monthly payments and waived fees. There are other options that may be a fit for you so it’s important to engage in the free consultation that will allow you to get a personalized recommendation of the best option for your needs.

How long does it take?

If you are wondering about the actual consultation, you should plan on the initial session taking roughly 30 minutes. There is a lot of information for your counselor to cover and depending on how many questions you have, it could take a bit longer. Once you make a decision about how you want to proceed with the best option for you, the solution you choose can vary widely in terms of time to complete.

It’s a wise idea to make sure you carefully evaluate all the options before you make a decision. Some of our frequently asked questions  may help you learn more.

Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt free. Speak with a certified counselor for a free debt analysis today