<p>People usually default on credit cards or loans because of unexpected financial hardship or mismanagement of funds. When consumers are unable to pay, interest continues to accrue and can increase debt. In these cases, counseling offers several benefits and can help those who are in debt to return to a life of normalcy.<br />
Certified professionals can help consumers with credit counseling, which combines education with a debt management program to facilitate an overall reduction of monies owed. A credit counselor will review a consumer&#8217;s credit history to determine the extent of the problem, and then find ways to use the current budget to pay it off. In addition to helping devise a budget, the counselor usually contacts the creditors and creates a management program.<br />
Establishing a DMP (debt management program) offers many benefits to the consumer. In most cases, the creditor will close any open or revolving accounts belonging to the consumer and may even limit future fees. Credit counselors will also work to establish a reduction in interest rates, which creditors may agree to in the hopes that it increases the likelihood of them being paid off. Some credit counseling agencies consolidate all debt into one monthly payment as part of the DMP. Consolidation can be advantageous because it is sometimes easier for consumers to pay monthly, as it is often less expensive than paying each debt separately would be.<br />
Credit counseling can benefit anyone who is currently in debt: lower interest rates and consolidation can reduce the strain on the budget that results from owing money; the knowledge gained from participating in the educational programs can help people to better manage their finances and avoid similar struggles in the future. Being proactive by seeking counseling before it is necessary can prevent credit problems from becoming worse, as well.<br />
Participation in credit counseling can improve a person&#8217;s life by raising their credit score, which is helpful for future mortgages and car loans and such. For instance, since most people can&#8217;t pay for a home in full, they will need a mortgage to buy a home, which is essentially a long-term loan that one has to be approved for. A bad credit score can make it impossible to get a good mortgage or any at all, as the lenders are hesitant to give one to a person who they deem fiscally irresponsible. Counseling can improve credit scores and make it possible for people to get a home, a car, or anything else that they need.<br />
It&#8217;s never too early or too late to seek out help with credit problems. People shouldn&#8217;t let their financial issues get the best of them, as almost everyone can improve their quality of life by reducing their debt through a management program and other counseling options.</p>
<h5>Featured images:</h5>
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<li> <span class="license">License: Creative Commons</span> <span class="source">image source</span></li>
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<p>Chuck Stevens is an avid blogger always looking to share his experiences and recommendations. He has spent ten years as a credit counselor. You can follow him on Twitter @chuckstevens12.</p>

How Credit Counseling Can Improve A Person's Quality Of Life
