Credit Counseling Service

Written by Abby Luttrell
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What can you expect from a credit counseling service? Your credit counselor will inquire about all your monthly expenses, your monthly mortgage or rent payment, and your monthly car payment and school fees for your children. Your house and car are secured loans, meaning that they are secured by collateral. Your credit card debt and other outstanding loans are "unsecured," meaning that they are given as an advance with no collateral.

Your credit counseling service will then determine your monthly income from all sources. Then a workable budget will be constructed. The key to advanced debt management is to bring down the balances of the loans so that they are eventually paid off, and not allowed to drain your income month after month.

Bill Consolidation Program

A bill consolidation program is the best approach when you are unable to make all your payments. Your credit counseling service will contact all your creditors in order to negotiate a lower rate of interest on your loan. In most cases, the credit card company will cut the rate in half or more.

This means a monthly payment which is much lower. With all your creditors agreeing to lower interest rates and lower payments, you'll be able to pay all your bills regularly. Debt consolidation companies will actually take over your payments to the creditors, allowing you to pay them one large payment a month which is then allocated to all your outstanding accounts.

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