Credit Counseling services work with your creditors to reduce interest and fees. This enables you to pay off your debt quicker and get on with rebuilding your credit. An added benefit is putting an end to the stress that comes from dealing with creditors.

What Does A Credit Counseling Service Do?

Credit counseling services can do much more then offer credit card debt consolidation plans. Credit counseling services are available to answer questions on all avenues of personal finance & credit, including home loans, auto loans, personal loans or applying for a mortgage.

If you qualify, you may enroll in a credit counseling program, which can often consolidate all your unsecured debt into one simple monthly payment. This single payment is usually lower than what you would collectively pay. Moreover, most major creditors will reduce or eliminate interest charges when working with a credit counseling service.

Benefits of Credit Counseling

A credit counseling service is not a lender and usually will not offer consumers a loan to pay their creditors. This would simply add to the consumers' debt. Since most credit counseling services have pre-existing relationships with creditors, they are in a favorable position to establish better terms & conditions. This by itself can cut your payoff time and get you out of debt faster.

The benefits of working with a credit counseling service include:

• Peace of mind from paying off debt
• Reduce interest rate
• Eliminate fees
• Professional debt consolidation assistance
• Consolidate bills into one monthly payment
• No loans required to qualify
• Live debt free in 12 - 36 months

Credit Counseling & Credit Scores

Simply going to credit counseling will not affect your credit score. You credit report won't be affected if you get credit counseling about managing your personal finances & credit standing. However, once a credit counseling service gets your creditors to lower interest rates, eliminate fees and / or adjust your monthly payments, creditors can notify each credit bureau. Your credit report will then show that you're in a credit counseling program.

How this will affect your future creditworthiness is up to each individual lender. Not all lenders view credit counseling as a negative. Some see it as a positive step in trying to honor your debts and maintain your credit standing.

You can have any negative affects of enrolling in a credit counseling service removed from your credit report once you have completed the program. Simply contact the credit bureau and state to them that you have completed the credit counseling program and you have paid off your debt. The credit bureau will verify this information with your creditors and then remove the negative notation. Negative notations can remain on your credit report for up to seven years, so make sure you request for the notation to be removed.