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What’s the Difference Between a Credit Counselor and a Debt Relief Company?
It’s no secret that managing your finances can be overwhelming and stressful. With so many different financial products available and various ways to manage your money, it’s understandable why people can feel lost and unsure of what to do. Credit counseling companies, like 360 Credit Consulting, and debt relief companies are two services that can help alleviate some of the stress associated with managing your finances. However, there are some key differences between the two, and it’s essential to understand them before deciding which option is best for you.
Keep reading to learn more about the differences between these two options and how 360 Credit Counseling can help you through financial assistance and credit education.
What is Credit Counseling?
Credit counseling is a type of financial assistance that aims to help people manage their debts and improve their credit scores. A credit counselor works with clients to develop a personalized plan to pay off their debts and improve their financial situation. They can also provide guidance on how to manage credit card debt, student loans, and other financial obligations.
At 360 Credit Consulting, our team specializes in:
- Credit Approval: improving your credit score can save you thousands of dollars
- Credit Education: use our free educational resources to learn more about credit scores and how to save more money
- Credit Restoration: our team will help you repair your credit score and look for any inaccuracies
Free Credit Analysis: we will analyze your credit for free and give you a report to help guide you to the path of better credit
What is a Debt Relief Company?
A debt relief company, on the other hand, is a for-profit business that offers debt settlement services. Debt settlement involves negotiating with creditors to reduce the amount of debt owed. The debt relief company then collects a fee from the client for their services. Debt relief companies can be helpful for people with large amounts of debt, but they come with risks.
The Differences
Approach
Credit counseling and debt relief companies have different approaches to managing debt. Credit counseling focuses on educating clients on how to manage their finances and develop a plan to pay off their debts. Debt relief companies, on the other hand, focus on reducing the amount of debt owed through negotiation.
Cost
Credit counseling is typically more affordable than debt relief companies. Credit counseling services are often provided by nonprofit organizations and are free or offered at a low cost. Debt relief companies, on the other hand, are for-profit businesses that charge clients for their services. The fees for debt settlement services can be significant and can add to the amount of debt owed.
Impact on Credit Score
Credit counseling typically has a neutral or positive impact on credit scores. Developing a debt management plan can help clients pay off their debts and improve their credit scores over time. Debt relief companies, on the other hand, can negatively impact credit scores. Debt settlement can result in a lower credit score and remain on your credit report for up to seven years.
Risks
Credit counseling is a low-risk option for managing debt. The services provided by credit counseling organizations are certified by the National Foundation for Credit Counseling and are regulated by state and federal laws. Debt relief companies, on the other hand, come with risks. Debt settlement can negatively impact your credit score and can result in increased taxes on the forgiven debt.
If you’re struggling with debt and looking for assistance, consider working with a reputable credit counseling organization like 360 Credit Consulting to develop a personalized plan to pay off your debts and improve your financial situation. Contact us today for a free credit analysis!
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What is 360 Credit?
360 Credit Consulting can help you save! Are you trying to get credit approval? Improving your credit will save you thousands of dollars each year with better interest rates.
Do you know what’s reporting on your credit report? Do you know what can make it better or worse? Do you know how to maintain a good credit score? Take advantage of our free educational resources and start saving money today.
Don't let a few bumps in the road hurt your financial future. Errors and inaccuracies on your credit are costly, and you might not even be aware of them. We find them and help you remove them.
We can help calculate a realistic time frame for you to achieve the results you want. 360 Credit Consulting analyzes your credit and guides you through the process.