The Disadvantages of Credit Consumer Counseling Services

When considering credit consumer counseling services, basically you are admitting that you have difficulties to pay back your debt and this is a good thing, as the only way to solve a problem is to recognize it. However, the outcome of the counseling service might lead you on a path that would reduce your credit score. If you still do not know by now, credit score is a number between 300 and 900. If your numbers are high, then you are considered as credit worthy and you will find it easy to get financial help. High credit scores will get you lower interest rates and monthly payments on your loan and better terms. If you have a low credit score then it will be the opposite of a high one.

There can be some disadvantages in going for a credit consumer counseling services as highlighted below:

· Most people never even finish the problem. What happens is counselors will draw up a budget for you which you will have to stick to in order to pay back your debt. This means that most of your salary will go towards paying back your debt and leaving you with no extra money every month. This is a source of worry to most people as this means that they do not have any money left to put aside for savings. Then you will have to live on a budget which can be quite stressful and impractical this making people drop out of the program.

· Your interest rates will increase the moment your creditors realize you are going for counseling as this means that your next option would be bankruptcy and they will not be able to collect their money at all.

· Even if your counselor managed to lower your monthly payment rates to your creditors, do not forget they need to be paid for their services, so there will be an additional amount on your monthly payments to cover their service fee. In the end you might end up paying more. Furthermore, even if your debt is reduced by $10.00, to them they have still delivered on their promise to lower your debt. That is of course the worst case scenario, but you just might be the one in a million whom it did not work for!

Therefore, before making a decision on going for credit consumer counseling services, make sure you understand all the advantage and disadvantages first. This is the key thing to do in order for you not to regret your actions in the future.

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