Certified credit counselors work with you and your unsecured creditors (that is, debts without collateral) to create workout plans that avoid settlement and bankruptcy. Consumers often come to us with accounts charging 26% interest or higher, but through our debt management plans, our average client repays their balances in full at just 7 or 8% (depending on who their creditors are), saving them a significant amount every month and even more over the life of the plan. The enrolled accounts are closed, and you’ll make one monthly payment to the credit counseling agency, which is then disbursed to your creditors. Plans usually run from 40 – 60 months, but a few creditors will extend their interest rate concessions to 72 months.
Contact an FCAA member agency! You may qualify for a debt management plan which can make your monthly crdit card payments more affordable. That may also free up money for your student loan payments.
At the time of enrollment in a debt management plan, you may lose points off your credit score because the enrolled accounts will be closed. That’s a fair trade-off for your creditors, who may be substantially reducing your interest rates and waiving your old, overlimit fees. (The credit counseling notation that may appear on your credit report is officially a neutral mark.) Then, as you make your monthly payments through the agency, your credit can improve over time, especially if you follow through on the counseling provided. Only you can control your behavior, so the agency can’t make guarantees about what will happen to your credit standing. Re-establishing a positive payment history will certainly help.
An FCAA member agency will work with your creditors to get you interest rate reductions on your outstanding debts. Payments will be made monthly ensuring there are no late fees and that your debtsare paid. You may also be eligible for other debt repayment programs that are only available through a 501 c3 nonprofit credit counseling agency.
No, it’s not! The only reason to carry a balance is if you cannot afford to pay the entire amount. Carrying a balance results in interest charges, adding to the amount of debt you owe. Carrying a balance and making small monthly payments will also extend the amount of time it will take you to pay off your credit card debt(s).
Checking your own credit report will not affect your credit score at all (those are called soft inquiries.) A hard inquiry, however, will affect your credit score. A hard inquiry is when a creditor or lender checks your credit report to get a better picture of your credit risk before lending you money.
Unchain Yourself from Debt!
This free calculator is designed to give you a true snapshot of your financial picture. It will walk you through your budget and give you a recommendation as to how best to get your financial footing back on solid ground.
