The truth is that yes, so long as you follow the advice, commit your time, and pay the asking fees, the organizations can help. Here are some of the valid claims that you can expect from working with a credit counseling agency:
1) A reduction or complete halt in bill collectors calling your house. The credit counseling agency has the power to stop, or at least partly eliminate bill collectors from phoning your home or work.
What causes this to happen on your behalf is the communication between the agency and your bill collector. For example, let's say that you are getting harassed to pay your late bill and extra fees on a computer that was purchased with a store credit card. Your agreement was for $100 per month for 24 months. After paying your bill on time for just over a year, financial problems hit and you became several months late.
When you hire a credit counseling agency they will make contact with the computer store and arrange for a debt payment plan. The calls may stop right at this point or the computer store may need a few payments before they stop phoning you. Either way, they will eventually cease bothering you altogether.
2) A credit counseling agency will help improve the status of your credit. Any positive effort that you put into resolving your credit problems will have the effect of lifting up your score a bit. And so long as the agency you hire does in fact work on your behalf at contacting your debt entities and arranging a payment plan, you can expect your credit history and score to get better over time.
3) You will receive a personalized, step-by-step budget that will benefit you for years to come. The problem which promotes the majority, if not all, of the credit problems that people face is due to not being smart with their money in the first place. If you had created a budget from day one, and followed it to the "T", then it is safe to say you would not be in the financial predicament that you are in today.
Your credit counseling agency will sit down with you and develop a written plan of action which will allot every penny of income you have coming in so that all of your needs are taken care of. A portion will go to paying off your debts. A portion will be set aside into a savings plan. A portion will be used for investments. And of course, there will be plenty of money left over for enjoyable activities.
Following this budget is a crucial element of successfully cleaning up your credit. If you don't have the money you need to afford the necessities of life, pay back creditors, save for the future, and resist the temptations of money-wasting habits of the past, then nothing else that a credit counseling agency can do will help you in the long run. You really have to use what you learn.
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