When borrowers find themselves in trouble, credit counseling is often a suggested remedy.
Counselors help borrowers understand their debt, options, and the consequences of different choices. In some cases, borrowers are required to see credit counselors before benefiting from government programs.
Does credit counseling do any good? Liz Pulliam Weston suggests that they may not offer as much value as we give them credit for. She reports that some borrowers are in too much trouble to even begin to benefit from counseling. Also, a substantial number of those who try to work with credit counselors end up failing.
Liz Pulliam Weston describes her findings on a Marketplace Money show from August 14th.
The conclusion: people need to understand the consequences of debt as soon as possible. By the time they make it to credit counseling, it's often too late. Go to credit counseling early and often if you have any concerns about your debts, if you pay the minimum on your credit cards, or if you can't see a realistic way out of debt.
Find a credit counselor at the National Foundation for Credit Counseling