Credit Counseling

Consumers with overburdened debt loads often find themselves turning to credit counseling agencies for help. Credit counseling provides the consumer with financial education, budgeting techniques and the tools to get out of debt.

When appropriate, the credit counseling agency will enroll the consumer in a Debt Management Plan (DMP). With the approval of the consumers’ creditors, the consumer is enrolled in a repayment plan that will pay back the debts in full. In return, the consumer will likely receive a reduction in interest rates on their debt as well as the cessation of late fees. Plans are typically set to be repaid in five years.

Consumers who fall behind on one debt often fall behind on multiple debts. Credit counseling can be a great resource for OLA members. Credit counseling agencies can walk a consumer through a budget to ensure they can afford the payments for the loan they are looking for (credit counseling agencies do not lend money). Or credit counseling can be a way to help the consumer who has fallen behind on payments get back on track and pay back outstanding debts.

Next time you have a consumer you think can use the help of a credit counseling agency, please refer them to the Financial Counseling Association of America (FCAA). All FCAA member agencies are accredited, licensed/registered as required by law and abide by strict FCAA standards. 1-866-694-7253 will direct a consumer to an agency licensed/registered to work with consumers in his/her state.