Credit counseling is just one option for those who are struggling with debt problems and credit issues to find relief and a light at the end of the financial tunnel. However, many consumers will shy away from getting the help credit counseling offers because they fear the process will ruin their credit score.
This is a misconception that is keeping consumers from getting the assistance they need to reshape finances. The reality is that without the help of qualified counselors, most consumers facing debt struggles will continue to maintain low credit scores and hurt their credit histories for a far longer period of time than if they had sought out help.
How Credit Counseling Helps
Qualified credit counselors will work with consumers on the big picture of personal finance. They will gather all of the pertinent information including debts owned and income earned by the consumer. The information will be analyzed and money management solutions will be offered in order for the consumer to regain control of their spending.
Credit counselors can be used by consumers at any stage of potential financial dangers. Whether an individual is starting to find it hard to pay bills or if they are already buried under a mountain of debt, credit counseling can be instrumental in preventing situations from getting worse.
Many consumers, even those managing their finances for decades, do not know enough about money management practices in this day and age. For that reason, credit counseling can certainly be an asset to any financial life. Understanding the new rules and regulations affecting personal finances is a big part in planning for the future.
Why It Doesn’t Hurt
The company that produces the FICO credit score, Fair Isaac Corporation, states that working with a credit counselor will not affect a credit score because it is simply not a factor in the calculation. However, there are some lenders who may conceive your work with a credit counselor to be a risky move. This is largely due to creditors having to be very specific about their lending standards. On the other side of the coin, if your finances were already in trouble before seeking counseling assistance, your credit profile is likely going to be flagged as a risk with creditors anyway.
The real goal with personal finance is to be up to date on the rules that affect your money as well as to get your finances on track and moving forward. If, historically, you have not be able to stay afloat with your existing money issues, credit counseling might be a good option to better educate and train yourself to see money from a new, more efficient perspective.