Credit counseling has emerged as one of the best debt solutions available to eliminate credit card debt, which are typically in the form of credit cards and personal loans. Of course there are other solutions available, namely consolidation, debt settlement and bankruptcy, however the drawbacks of each of these solutions relegates them to secondary status for the majority of borrowers in trouble. Consolidation relies on the borrower’s ability to get a new loan, which is an especially difficult proposition in the current lending environment even for consumers with very little debt. Debt settlement can be problematic for a number of reasons, not the least of which is that it does serious damage to the consumer’s credit. And of course bankruptcy exacts the greatest damage to credit of any of the solutions, and the damage lasts for anywhere from 7 to 10 years.
But there are sound reasons for choosing credit counseling on the strength of its own merits. Consumers can enroll in a debt management plan through the credt counseling agency and gain access to the DMP’s outstanding benefits. Among these benefits are reduced interest rates, an end to over-limit and late fees, a consolidated monthly payment, relief from collection phone calls and the ability to deliver these benefits without damage to the consumer’s credit score.