Providing Financing Tips in Light of Settlement Solutions

What is Credit Counseling?

It is the provision of assistance to individuals experiencing financial difficulties through advice and debt management plan preparation. Non-profit credit counseling agencies can offer a variety of services, including the preparation of debt management plans with creditors. However, do not confuse them with settlement companies.

What is Settlement?

Settlement refers to negotiating with creditors and lenders to pay less than what you owe. This can be done on your own or through a third party known as a settlement company or debt relief company.

Credit Counseling vs. Settlement

When deciding between credit counseling and the settlement process, it is important to understand how each works. Below is an overview of what each of these systems can offer, how much it will cost you, how it may affect your credit score, and how long it may take to get out of debt.

Pros of Credit Counseling and the Settlement Process

Credit counseling agencies are often non-profit organizations and can create a debt management plan to help you pay off your debts. Settlement companies focus primarily on reducing the total amount of debt owed, but they can cause serious issues with credit and taxes.

How to Find a Reliable Company

Make sure the financial advisory agency is a member of the National Foundation for Credit Counseling or the American Financial Wellness Association. This will tell you that the agency follows strict and accredited standards. It will confirm that they are certified counselors and accountable. You can also check the Better Business Bureau website or other review sites.

Conclusion

For the majority of people, credit counseling and a debt management plan will often be the better route compared to the settlement process. If you choose that settlement is the path you want to take, you should do careful research to find the right company for that. Ask plenty of questions and look for transparency in the services they provide.

Source: https://www.thebalancemoney.com/credit-counseling-vs-debt-settlement-5184772