If you’re struggling to pay your bills, Canadian credit counselling might help you get your finances back under control. Credit counselling services can give you the tools you need to pay off your outstanding debt and even help you form a long-term plan to stay out of debt permanently. With debt counselling, you will work with finance professionals who can evaluate your current situation and help you get back on solid financial ground.
Why Use Credit Counselling Services?
Problems with your credit can have long-term implications. If you are late paying your mortgage, car payment or credit card bills on a regular basis, you will find your credit rating rapidly slipping. If you do not deal with this situation promptly and effectively, it can lead to:
- Loss of your home
- Loss of your car
- Inability to procure future loans
- Inability to acquire credit cards
Although it is possible to recover financially from any of these occurrences, it is a long and difficult process. It’s better to bring your finances under control before the situation becomes serious and to keep them under control. Credit counselling services will help you get started.
How Credit Counselling Works
The credit counselling process involves taking a long, hard look at your finances with the assistance of a financial professional. Your income and expenses are evaluated and you and your advisor will put together a long-term plan to bring you out of debt and help you stay out of debt. This can include negotiating with your creditors to reduce your interest rate and lowering your monthly payments by extending the payment period. Consumer credit counselling will help you determine what approach will work best for you and will provide the tools you can use to move forward with your plan.
Find the Right Solution For You
Advantages of Credit Counselling
Consumer credit counselling gives you a clear, unbiased view of your financial situation and what steps you need to take to bring it under control. Working with a financial expert can give you a new perspective on your situation and give you concrete actions to take to reach your goals.
Your work doesn’t end there, though. It is up to you to execute this plan and stick to it in the long term. You may need to work with a debt settlement or debt consolidation company for the best long-term outcome. Your debt counsellor can help you find the best services for your needs.
Disadvantages of Credit Counselling
Credit counselling Canada companies do not reduce the total amount of debt principal you owe and so in reality you could be in debt longer than with another strategy like debt settlement. They can however sometimes negotiate to reduce the interest rate on your debt and sometimes lower your monthly payments (by extending the period of time you have to pay off your debts). Another disadvantage of credit counselling in Canada is that it is reported on your credit report as an R7. This can have a negative impact on you when it comes to applying for any type of credit. It is also important to realize that counselling companies are usually working for the creditors you owe, so may not always have your best interest in mind.
Of course, our southern neighbours to the south in the U.S. do not have these ratings. In addition, they spell it
“credit counselling” with one “L.” This is all to make the point that both the rating systems and available credit counselling are different. Even with the similarities, credit counselling in the states adheres to a separate set of financial laws.
Is Credit Counselling Right For You?
Credit counselling can be useful if you are trying to resolve debt while avoiding bankruptcy. However, unlike counselling, debt settlement actually reduces the total amount of debt you owe by 40 – 60% and can get you out of debt in half the time. Every situation is unique, and exploring all of your options will help you make the best decision. Fill out the online debt relief form for a free debt consultation today and get started on your journey back to financial security.