| By :
Adrianna Noton
Credit counselling is designed to help all sorts of people with their finances. Although primarily designed for those in financial difficulties, it can be useful to many others. It is available from specialist counsellors, banks and other financial advice offices. The support offered is useful in helping people take control over their financial affairs, specifically if they are presently or in danger of becoming out of control. The advice offered may include a debt repayment plan, spending controls or even a voluntary bankruptcy agreement. People experiencing financial difficulties are most associated with this type of support. Temporary hardship may be caused by anything from redundancy to a family bereavement. In this case counselling can help manage the debts until the situation has eased, ensuring that the person's credit profile is not damaged long term. The advice will often include reducing non-essential spending, using cash facilities only and agreeing an interest-only period with lending companies. These controls can be removed as the situation eases. For those in long-term difficulties, the controls put in place will need to be stricter and stay in place for longer. The situation may have arisen from long-term over-spending, or over commitment in terms of debts. A refinance loan with a bank or lending company could be the solution, but this is usually only available to those who still have an above-average credit score. An individual may be best advised to enter voluntary bankruptcy, which will involve making token repayments to lenders and starting again. This is known as a last resort however, as people who take such a decision may not be eligible for lending again for a long time. Another option is the entering into of a debt management plan. This involves a significant reduction in the payments being made to each creditor. The companies concerned are usually keen to accept this as the alternative is that the borrower cannot make any repayments whatsoever and enter arrears. People whose finances are in order may also benefit from some advice. This could result in consolidating existing facilities to reduce monthly payments. An examination of monthly spending habits may show areas where money could be saved, and better planning of when payments come out in comparison to funds coming in could also make things easier. Even if you presently have an excellent credit score it is easy for this to decrease rapidly with bad management, therefore addressing any potential problems before they occur is the key. Advice in this area is on offer from a variety of sources. Your bank will offer a free consultation with one of their specialists, or you may prefer to speak to an independent. Either way they will expect you to provide them with a list of your monthly household income and outgoings, and will compare this to any existing records they have, or those which they request from you. There is no obligation to agree to the terms suggested, so don't feel under any pressure. Advisers are qualified to talk to all sorts of people about their finances. They will not make moral judgements regarding spending habits and will offer support and guidance. Local advice bureaus will also help on an informal basis, but their resources tend to be much more limited. You may find credit counselling to be of help to you. Whatever your credit profile is, everybody can benefit from specialised advice and it might help you to protect your credit profile or rebuild it if necessary. You can obtain the help from various places and it is often free.
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