by: Simon Harris

If you are in trouble financially, you have probably heard the term credit counseling, but do you understand what it is? Oftentimes this term is used in the same sentence as debt negotiation or debt settlement, but actually, its a completely different process. With credit counseling, you will actually work with a credit counselor to pay off your debt in smaller, monthly lump sum payments that you can afford.

The people most likely to need credit counseling are those who are receiving troubling phone calls from bill collectors, or whose accounts have gone to collection agencies. If you think that you may benefit from using a service like this, please read the following outline of the best way to work with a credit counseling service.

First, youll need to be able to identify a good credit counseling service, and not fall victim to one of the many scams that are out there. Start by avoiding any ads that promise you quick fixes for your credit report-quite simply, there is no such thing. Instead, look for a reliable company accredited by Consumer Credit Counseling Services.

Next, youll have to meet with your credit counselor, and provide them with all of the details of your debt. Dont be tempted to leave anything out because he or she will need that information in order to create a workable re-payment schedule for you.

Now, youll get to sit back and allow the credit counselor to work for you. They will contact all of your lenders and inform them that you are trying to create a plan that will allow you pay off your debts. They will work with them all and coordinate a re-payment schedule that you can live with. Oftentimes, they will be able to lower your interest rates in order to allow for lower payments.

Some credit counseling services offer a debt management system. What is it? Instead of having to keep up with all of the payments yourself, you will have the option of submitting one lump sum payment to the credit counseling service and they will do it for you. One note of caution here: there have been

What will you pay for all of these services? A reputable company will only charge you a small fee, somewhere around fourteen dollars per month. Thats another way to know if you are dealing with a scam operationif they want a lot of money up front, its almost a guarantee that they dont have your best interests at heart.

You should be aware that working with a credit counseling service can do some damage to your credit report. However, for most people who are at the stage in their financial lives who would even consider such a move, would most likely benefit from it. After all, its much easier to explain away an honest attempt to get your finances in order than it is to explain a bankruptcy or a report full of charge-offs.