Credit Counseling Signs That You May Need Help
Credit counseling is a viable option
for those who are feeling the stress of being overwhelmed
by debt. Credit counseling primarily offers assistance
with working out a credit and debt repayment plan
for an individual to gain control of their finances
by creating a structured budget for an individual
to follow. Credit counseling offers an individual
the option to repay their debts, if needed, through
a credit counseling debt repayment program. This is
where the credit counseling organization becomes in
contact with an individuals creditor to ask for lowered
interest rates and for the credit provider to stop
any late and over the limit fees that may be attached
to a particular credit card. Credit counseling organizations
that provide a no charge credit and money management
education program for an individual typically have
the individual consumers best interest on their mind.
Credit counseling may be needed if the
following signs are present:
1. Are you using more and more of your
income to pay your debts?
This becomes a problem if you are at the point where
the money going out is less than or nearly less than
the money coming in. Credit counseling would be a
wise choice. Speaking to a credit counseling organization
at this point can help because in a counseling session
you may find that by sticking to a sound budget you
may be able to avoid additional help. The best part
is the counseling sessions should be at no charge,
make sure of that before speaking to an agency.
2. Do you make only the minimum payments
due on your loans and credit cards each month?
Look at your budget, that is review what dollars are
coming in and how those dollars are going out. You
may find that by tweaking your budget you may be able
to avoid credit counseling by implementing a plan
of savings through following your own plan. This should
allow you to free up more money to be more aggressive
in repaying your debt. Credit counseling may be needed
if you have reviewed your budget and cant find additional
funds to pay more than the minimum amounts to your
credit cards. Paying only the minimum to your credit
cards will only prolong the length of time needed
to repay your debt. Some credit cards may charge such
a high interest rate that it could take years upon
years to pay off with minimum payments.
3. Are you near, at, or over the credit
limit on your credit cards?
Once a credit card is nearing its available balance
or even worse if the credit card is over its credit
limit it is time to take aggressive action to pay
down the balance. If this is a situation you are finding
yourself in try finding additional dollars to bring
your balances down. It is recommended that when doping
this you do not open another credit account or take
a consolidation loan to repay these accounts as more
often than not taking a loan to pay a loan will result
in more debt being owed. If you cant find the dollars
to apply towards the credit cards try speaking to
a credit counseling organization. They may be able
to lay out a plan for you to repay the debt on your
own, or through their own credit counseling services.
4. Are you paying your bills with money
intended for other things?
If you find yourself robbing Peter to pay Paul with
your credit cards it may be acceptable if you are
replacing the dollars that are going to unnecessary
items such as cable TV., cell phone paymentsetc. Just
as long as those accounts have been paid and you are
not accruing any more fees from them. However if you
find yourself using dollars that are intended for
necessary items such as a car payment, a house loan,
food, etc. then you are most likely in a situation
where credit counseling is an option you may need
to look into. Look at speaking to a certified credit
counselor that will offer a solution to your financial
needs. Getting out of the red is very important, the
sooner you take action the better.
5. Are you borrowing money or using
credit cards to pay for things you used to buy with
cash?
This can be very problematic when you are utilizing
your credit to purchase things like groceries, fuel
or other disposable goods. If you are currently in
the act of doing this review your finances to determine
if you can avoid making these purchases with your
credit. If this cant be avoided try speaking to a
credit counseling organization. They should be able
to give you the tools needed to avoid this costly
practice.
6. Do you often pay your bills late?
There are a few reasons on why an individual may frequently
pay their bills after the due date. One of the main
reasons is that there isnt a budget in place to follow,
therefore rendering the payments of the debt to the
instance of when a person gets paid. If a payment
is due on the 25th and a individual is paid on the
30th this typically develops into a past due payment.
This is due to the fact that the majority of people
live from one paycheck to the next. Creating a savings
account and a budget plan will resolve this issue
for the most part. Paying bills late on a regular
basis may also be attributed to an individual being
upside down with their debts, meaning that there is
more money going out regularly than coming in. Once
this point is reached it may be time to speak to a
credit counseling organization. It is urgent to seek
help at this point in order to order to avoid long
lasting damage to your credit.
Regardless of your situation it is important
to seek help when feeling the pinch of being upside
down or behind with your finances. Taking measures
early will result in less dollars that go out in the
long run. Taking action early will also result in
a lesser need of bankruptcy which has long lasting
negative impact on your credit worthiness.
Rick Munster lives in Boise, ID where
he works as the Media Planner for Debt Reduction Services,
http://www
.debtreductionservices.com. When he's not busy
working with the media he enjoys writing, or getting
away to do a little fishing.
