When you get desperately deep into debt and fear bankruptcy or foreclosure, you may be wondering where you can get free or low-cost help for your financial problems. Whatever your financial situation, the affordable option of credit counseling from a local professional can benefit you. This article offers explanations of two aspects of credit counseling -- a definition of the term and a brief discussion of some benefits of this type of counseling.

First, you need to understand what credit counseling is. According to the NFCC, when you meet with a Certified Consumer Credit Counselor, you will receive an objective review of your financial situation. The counselor can offer suggestions to solve your credit problems by helping you “develop a spending plan that covers your living expenses and payments to your creditors.” That is reassuring because, without talking to a credit counselor, you may not be able to devise a plan for paying back your monthly debts. Credit counseling is a confidential way to get professional help before you make the wrong decisions that will affect your credit poorly for the next seven to ten years.

What are some other benefits of credit counseling besides getting relief for your immediate situation?

A study conducted by the Georgetown University Credit Research Center (CRC) in 2002 found that:

“Most [credit] counseled borrowers improved their risk scores relative to other borrowers with similar initial risk scores in the three-year evaluation period following their counseling. And, the large majority of counseled borrowers had significantly fewer accounts, lower debt, and fewer delinquencies relative to other borrowers, behavior that is consistent with the advice provided in credit counseling.”

In other words, once you get your financial situation under control with the assistance of a professional credit counselor, you are more likely to maintain a healthier credit situation for several years after using the service.

These powerful examples of positive results should encourage you to try credit counseling. It may cost you a little bit of money, but obtaining counseling has the added benefit of helping to keep your creditors at bay. Once your credit counselors find out you are undergoing credit counseling, they might confirm this first and then back off while you develop a plan. Also, remember that credit counseling is necessary before you file bankruptcy. Contact a local agency and get help with your financial problems today. It is a smart way to avoid ruining your long-term credit.