If you have already attempted to work with your creditors and your credit problems are continuing, it is time to talk to a credit counseling service. Credit Counseling Services Several non-profit organizations offer free help resolving debt problems. These organizations work with you to come up with a budget and a debt repayment plan, then they contact your creditors and arrange new terms if possible. The advantage of using a credit counseling service instead of contacting creditors yourself is that they already have a relationship with thousands of creditors, and they will work out the details for you. In addition, you often have to make only one payment each month to the counseling service instead of writing many checks as you would if you did it yourself.
Creditors allow different types of arrangements under debt repayment plans.
Some may reduce the interest you pay until the loan is paid off. Others may lower your minimum monthly payment. This allows you to pay less while keeping your account in good standing so you will not be compounding your debt by adding late fees each month. Using a credit counseling service will not prevent delinquent accounts from becoming part of your credit history. Although the credit counseling service does not report to any credit reporting agencies, your creditors may report any payments that have been late or missed, or may report that your account is in counseling.