You should opt for consumer credit counseling the moment you realize that you are unable to pay your bills on time, or are unable to pay the monthly minimums on your credit cards. There is no point in reaching a stage where debt collectors start landing at your doorstep every morning to extract their dues.
It is important to make a wise decision when it comes to your selection of a debt counselor. If you make a good choice, you will be given helpful tips on controlling your debt and spending habits.
If a company wants to charge you any more than a $10 start-up fee, beware! There are many fraudulent companies that claim they can help you to eliminate all of your debts for practically no money. It is important to avoid such companies at all cost.
A good idea is to confirm whether the firm is registered with either the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agency;
It is also important to make sure that the company you are making payments to is paying your bills in a timely fashion. Some companies have been know to accrue missed or late payments, which will have a negative impact on your credit rating. If this is the case, it makes more sense to handle your debt problems yourself.
It has long been known that credit counseling has its pros and cons. While such counseling may enable you to get control of your debt problems, it will destroy your credibility with future creditors. Even though you may have a little trouble getting creditors to loan you money in the future, many feel that the pros, such as getting control of your debt, outweigh the cons. Once your debt is resolved you should be able to once again get a loan.
It is imperative that you thoroughly investigate the company you plan to use for counseling. Some may even harm your credit rating due to their informing your creditors that you are a credit delinquent. It is better to look for a company that opts for sampling letting your creditors know that you have accepted credit counseling.
As a general rule, credit counseling is very beneficial. It does have its limitations, though. If you a extremely deep in debt and bankruptcy seems imminent, they may be unable to help to you. Also, unless you learn to exercise some financial discipline and reduce your spending, credit counselors will be unable to help you.