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Improve Your Credit With Debt Counseling

April 11, 2012 | Comments: 0 | Views: 91

When it comes to finances and debt management, a good credit is synonymous with a good name. It establishes confidence and trust upon a debtor's willingness, sincerity and capacity to fulfill obligations at stated times. For creditors, this person's credit is the essential factor that will guide them in the assessment and approval of loan applications that may be filed before them. To improve, or even simply maintain, a person's credit, the engagement of professionals engaged in debt counseling is often beneficial.

Debt counseling involves relations between finance professionals and debtors in order to arrive at a sound and comprehensive program that can aid the latter in the management of debts. Under this scheme, the debt counselor helps a client identify key factors that may improve or ruin a credit, such as sources of income, spending habits, attitude towards savings, and the will to meet financial obligations as they fall due. Since overspending of an individual is often the principal factor that leads to failure to pay personal debts, the debt counselor may also assist a client in the formulation of a financial budget to faithfully observe. A person who is able to maintain expenses in accordance with set budget gets the lesser risk to default in the payment of obligations, resulting in an improved credit that is favorable for future transactions.

Given the numerous individuals, agencies and organizations offering debt counseling services, a person must be prudent and exacting in choosing the counselor to engage. Prospective clients need to carefully assess the debt counselor's work experience, program success rates and sincere desire to be of service. It is also important that the client is comfortable in communicating with the counselor, considering that a counselor must be able to obtain all the correct information from the client in order to come up with a program that can best improve the client's credit.

For those persons whose credits might have already been blemished due to past records, debt counseling can also be of invaluable help. As part of a debt management program, able debt counselors present to their clients the different modes through which obligations that have already defaulted can be repaid. The options that are usually presented to the distressed debtors involve debt consolidation and participation in balance transfer programs. The debtors are also taught of techniques on how to negotiate effectively with their creditors, including ways on how to ask for reduction of interest rates, waiver of charges and penalties, and even a restructuring of the loan by setting a longer period of time during which the obligation can be fully satisfied. Depending on the agreement between the debt counselor and the distressed client, the latter may even agree to be the one to directly transact with creditors for a possible settlement.

At the end of it all, what is most important is for the debtors to faithfully comply with the plans and their obligations resulting from their debt counseling sessions. Only through this determination can debtors eventually eliminate their debts and then regain their good credit.

The author gives advice when it comes to South African debt counselling. To read more visit

Source: EzineArticles
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