Credit counseling is marginally effective once all of your accounts have been charged off. The reason is that most of your options are off the table when your accounts are turned over to outside collections.
Experienced credit counselors are familiar with multiple techniques and strategies to eliminate credit card debt. Reputable agencies can help you understand all of your options. If you wait too long, then you only have a few options left.
It is natural to delay getting help with finances until creditors start calling. Personal finance is a private matter, and most people feel uneasy about speaking with a stranger about their financial troubles. However, these are the options you give up by delaying your request for assistance.
Self-Guided Strategies
Credit counselors understand how creditors determine interest rates, and they can help you develop strategies to reduce interest rates on your own. There are steps you can take to improve your success in negotiating your own best interest rates on existing credit accounts.
Even balance transfers can be better utilized when you have maintained a good credit rating. Permanent rates of under 6% or promotional rates as low as 0% are possible when you have a good credit history.
Some loan options may work also. These can include both unsecured signature loans or loans requiring collateral, such as a home equity loan. Even refinancing may make sense if you can both get a lower rate and pay off debt without extending the term of the loan.
Debt Management Programs
If you have a hard time making your payments, then a debt management program may also provide assistance. If you wait until your debts are turned over to collections, then you lose the ability to benefit from interest rate reductions and lower consolidated payment options.
The best bet is to contact a reputable credit counseling organization at the first sign of trouble. Perhaps just a slight modification is all you need in order to correct your financial situation.
