Important Questions to Ask a Credit Consulting Service

Working with a credit consulting service can mean the difference between completely damaging your credit status by making late payments or missing payments, and staying on top of your finances on a monthly basis. To make the best use of your time with a trained advisor at the credit consulting service you use, it’s important to have certain financial information available and to ask the right questions. You should provide a written list of your monthly income for the last few months as well as detailed reports of your spending habits and debt payments. Additionally, you will definitely want answers from the credit consulting service on the following questions.

First, ask the counselor to list all of your options for paying off your debts. Any reputable credit consulting service should do this as a rule, but you’d be surprised how many do not. For varying reasons, a lot of counselors are taught to push the most profitable services their companies offer, excluding other possibilities. It’s an obstacle you must get around by blatantly asking the credit consulting service provider for a complete list of options. The second most important question to ask the credit consulting service is the cost of each of their services if you ultimately decide to hire them for debt management, debt consolidation or a home equity loan. Get specific answers in writing.

Keeping in mind that one of your goals in seeking out the advice of a credit consulting service is to salvage your credit history, be sure to ask your counselor to detail the consequences of choosing each debt repayment plan available. For example, ask whether entering into a formal debt management plan with a company is likely to hurt your credit history more, less or about the same as taking out a home equity loan. The idea is to not only get a picture of how to pay your monthly debts now, but which specific form of repayment the credit consulting service recommends for doing the least possible damage to your credit score and history. Remember that negative credit issues can remain on your credit history for up to 7 years (bankruptcy for up to 10 years).

Finally, the counselor you talk with at any reputable credit consulting service should be able to help you calculate how long it will take to repay your debts under various scenarios, but it is your responsibility to ask as many questions as you need to as this can be an eye-opening experience. Depending on how high the interest rate is on a debt that you’re repaying, making just a bit more than the minimum payments every month can literally trim years and hundreds or thousands of dollars off the total you end up paying.