Having debt outstanding is a major personal financial crisis as it lowers your credit score. A lower credit score in turn reduces your chances of obtaining future loan approvals. However, complex debt situations like multiple debts with high interest rates often become unmanageable to be resolved without professional help. A debt counselor or credit counselor provides key financial insights into how to navigate complex financial situations. The following section of the article discusses the benefits of taking help from a debt counseling service for personal finance.
The Role of Debt Counselors
Complex debt situations often become overwhelming to manage without professional help. Taking help from a debt counselor is the best way to navigate a financial crisis in such a situation. A debt counselor would evaluate your unique financial situation and offer personalized advice. Next they would come up with a strategic action plan enabling you to pay off your debt enhancing your financial health.
Benefits of Partnering with Debt Counselor
Professional debt counselor possesses years of experience in handling varied complex debt situations. As a result, they are skilled in evaluating financial situations and to come up with strategic plans readily. Thus, partnering with certified credit repair experts would enable you to come out of financial tangles much faster than the DIY methods. Some of the key benefits of partnering with debt counselor or credit repair experts are:
- It can help you to reduce the overhead debt burden quickly enhancing your credit score. For instance, they can advise you to manage your debt payment by paying off large debt first and smaller debts later. This may save you from late payments. As payment history accounts for 35% of FICO scores, late payment would negatively impact your credit score.
On the other hand, your credit utilization ratio must be less than 30% to maintain an impressive credit score. Debt counselor can help you to restructure your financial profile by strategic planning.
- Debt counselor enables you to reduce debt related costs. They can negotiate with creditors to enroll you in a debt management plan with new payment plans. This is not possible for an unprofessional person to negotiate such plans directly with the creditors. You need to pay a monthly fee to your debt counselor and they would pay the debt on your behalf. This might seem as an extra financial burden but this must be lower than paying debt cost.
- Debt counselor provides additional financial advice other than debt management and credit report enhancement. You can obtain crucial advice on how to strategize your budget according to your income. They can also help you to manage your daily expenses and reduce extraneous expenses. This financial advice would help you to streamline your future financial planning and keep you out of financial burdens.
Conclusion
The blog has discussed the important benefits of partnering with debt counseling services for managing personal finance. You must make sure that you partner with a certified debt counselor to avail the best service. Unauthorized agencies would further jeopardize your financial situation.
