Countless Americans are struggling with debt. With the coronavirus pandemic, higher fuel prices and a slowing economy, more people need help managing their finances and paying down debts. Whether you have student loans, credit cards or auto loans, the best way to manage your finances and reduce your debt is to work with a skilled professional.
A debt management specialist can guide you through your options and help you decide which form of debt relief is best for you. He or she will evaluate your finances, review your credit reports and suggest a personalized plan to help you eliminate debt or improve your credit score. Choosing the right debt relief option can be challenging, and you should understand how each option might impact your credit score, benefits and fees.
The first step to getting out of debt is figuring out exactly how much you owe. To do this, gather your bills, pay stubs and receipts and create a budget. A budget will help you identify areas where you can cut spending and focus on eliminating your debts.
Credit counseling is a free, confidential service that can help you develop an affordable monthly budget and provide financial education resources. Credit counselors are certified in budgeting and can help you find the best debt relief solution for your needs. Unlike debt settlement companies, debt counseling is not for-profit and is required to act in your best interest.
A debt relief specialist can recommend a debt management program to help you pay down your debt and save for the future. They can also negotiate with creditors on your behalf to settle debts for a fraction of what you owe. This can damage your credit rating and may require you to sign a contract that locks you into a debt settlement program for 3-5 years.
Debt settlement companies, also known as debt settlors, are for-profit businesses that promise to settle your unsecured debts for pennies on the dollar, often for a fee. However, settling your debts can damage your credit rating, which makes it difficult to borrow money in the future. A debt management program offers a safer and more reliable approach to eliminating your unsecured debts.
In addition to a college degree, the qualifications you need to become a credit manager can vary from company to company. A bachelor’s degree in finance, accounting, economics, banking and finance or a related field can give you a solid foundation of knowledge about the fundamentals of credit analysis and best practices in the industry. Additional training programs and certifications can help you advance your career. For example, the Certified Credit Professional (CCP) certification from the National Association of Credit Management provides proof that you meet professional standards and have the skills to protect cash flow for your business.