If you’re applying for a loan, combining finances with your partner, or taking any major step in life, your credit matters. Sometimes, though, our credit scores can get in the way of you achieving that next milestone. Rather than put your head in the sand and hope it improves on its own, you can actually do something about it.
Top credit repair companies offer real people, real guidance on reclaiming their confidence and power when it comes to their credit. You don’t have to drown in unfamiliar jargon and rake over the numbers yourself.
Credit score counseling is a huge first step to repairing your credit and achieving your dreams. In this article, we uncover the differences between credit repair and credit counseling, and what you can expect from your credit counselor.
Is Credit Counseling Different Than Credit Repair?
Understanding the differences between credit repair versus credit counseling will help you rebuild your credit score. Let’s explore the key differences between credit counseling and credit repair.
What Is Credit Repair?
Credit repair companies offer quick-fixes to improve your credit score by searching for outdated information or inaccurate items on your reports. They then send letters and appeals to credit bureaus on your behalf.
What Is a Credit Counselor?
A credit counselor is simply any professional with a strong background and understanding in financial literacy, specializing in credit reports and scores. They offer guidance on how to manage your finances in a way that specifically targets strategies that will improve your credit score. This can include building a plan to pay off debts and analyzing your budgets.
To summarize, they take a holistic approach to your credit. They help you develop strategies and habits to not only repair your credit, but help you build and maintain strong credit.
What Does a Credit Score Consultation Do?
Your initial credit score consultation will lay the groundwork for your plan to repair and rebuild your credit. Note that seeking help from credit counselors or credit score counseling does not negatively impact your credit score, but if you follow the plan set by your consultant, it can have a positive impact.
Services offered by credit counselors vary from client to client, meaning you will always have a credit repair and financial plan customized to you. This can include debt management plans that you’re already worried about or behind on, negotiating lower interest rates or monthly payments on your behalf, and even negotiating to have late charges waived.
Here are a few other things your credit score counselor can help you with:
- Develop a budget for yourself
- Develop a plan to help you exit the “paycheck-to-paycheck” lifestyle
- Manage your bills and debts
- Improve your financial literacy, including enrolling you in financial workshops
- Avoid bankruptcy
- Gain access to all of your credit scores and reports
What your plan looks like will depend on your individual situation. Your initial meeting will likely include you divulging your current concerns and financial status, giving relevant information to the counselor, and building a game plan to get your credit back on track.
To Wrap It Up
Now that you know what to expect, all it comes down to is finding a credit counselor you trust. The Phenix Group offers 100% free consultations, which is a green flag for when you are searching for a reputable credit counselor. Your first step is to set up your free consultation, wait for your counselor to develop your individualized plan, and implement the plan to repair your credit–it’s that simple.
Understanding financial lingo can be tricky, and most creditors make their contracts difficult for the average person to understand. If you’re ready to build your financial literacy—and your future—check out our other posts. We detail everything from how Experian Boost works to how to remove late payments from credit reports. Get started with us today!