Affordable debt consolidation is just around the corner with Consumer Credit Counseling
Woman reading her credit card numbers
Discover what services a credit counselor may offer youHere is where you can find answers to frequently asked questions about consumer credit counseling

Frequently Asked Questions

Q: What is Debt Consolidation?

A: This is when your debts are grouped together and paid off by a new individual loan. A consolidation loan aids in budgeting simply because it requires a single monthly payment lower than the total sum of the original individual debt payments. A consolidation loan is usually at a much lower interest rate than for were associated with the former individual debts.

Q: What is Debt Negotiation?

A: This is the process by which various lenders are convinced either to reduce the amount of interest they are charging, change the payment terms to something more favorable for you, reduce the amount you owe, or settle the debt once and for all for. This is not an option for all debtors and it usually is executed by a single, lump payment that is typically for a fraction of the total owed. This can have a dramatically negative effect on your credit score, but it can be preferable to bankruptcy, which is something your creditors hope to help you avoid. Why? They stand to get nothing if you file bankruptcy.

Q: Will Credit Repair Services Hurt my Credit Score?

A: Yes. However, if you are overwhelmed by debt, chances are that you've failed to juggle payments, likely missed paying them on time, or missed payments altogether. That means your credit rating has likely already slipped or even plummeted. Keeping your score high is likely no longer a realistic option. Ah, but getting help so that things don't go from bad to worse is. You can meet with a consumer credit counselor and get the lowdown before you permit them to move forward in any event. So, let them help assess whether their help - and the tools at their disposal - are worth the knock against your credit.

Q: What is FICO?

A: Short for "Fair Isaac & Company," a FICO score is the most common way of computing a credit score. This claims to address the likelihood that a borrower shall default on a loan. The FICO score can range from 300 to 850, with sixty percent of scores falling between 650 and 799. For a small fee your actual credit score, which can vary between the three reporting agencies, can be obtain from the three, which are: Equifax, Experian, and TransUnion.

Q: Do credit counseling services cost anything?

A: Generally, yes. There are so-called Christian debt counselors who offer their services as a ministry through some churches and church organizations, but there are also scammers making the same claim. They lure people in with the promise of free services, but then pressure or guilt people into making "voluntary donations." Even not-for-profit credit counseling agencies have fees built into the solutions they offer, or else they couldn't keep their doors open. But legitimate counseling agencies are not out to exploit anyone, especially not those in financial need. However, debt negotiation fees in particular can be a few hundred dollars. It all depends on the complexity of the negotiations a counselor might face.