Martin finds out he could have avoided a sky-high interest rate in our latest video collaboration with Matthew Giuffrida.
Most people in Lethbridge are bound to run into financial problems at some point in their lives. From a bit of credit card debt to a full-blown bankruptcy, any of those problems can quickly lead to a stressful situation if you don’t have the right type of assistance. Then again, you may just be looking for some simple advice.
No matter the size of your financial problem, you can rest assured knowing that Lethbridge is home to many credit counselling services that can help you. Take a look at the information below if you’re interested in learning more about the process.
Interested in how your first credit counselling session works? Click here.
What Credit Counselling Can Do For You
Simply put, credit counselling is a kind of financial education you can enter. Most counselling agencies in Lethbridge offer a variety of courses, programs, and solutions. If you wish, you’ll even have the opportunity to work one-on-one with a counsellor of your choosing. After all, having professional help in your corner can be a huge asset, whether you’re trying to negotiate with a debt collector or you’re just looking to improve your credit.
Choosing Your Counsellor or Agency in Lethbridge
Now, before you head to the first credit counselling service you come across in Lethbridge, it’s essential to do prior research to confirm that the counsellor or agency you choose is certified and truly right for you.
For instance, while some counsellors and agencies in Lethbridge are non-profit, others may charge a fee for their services, which can be too expensive for you and only lead to further debt problems. Many of their courses, programs, and solutions can also have a positive and negative impact on your credit, while others will have no effect at all.
Another important thing to watch out for is the legitimacy of your chosen counselling service. Unfortunately, there are many predatory organizations and scammers in Lethbridge and Canada, in general, that will attempt to use your desperation against you. Despite some predatory agencies being real businesses, they will offer ineffective solutions to your problems in exchange for ridiculous fees. Scammers are even worse because they establish fake agencies so they can steal your money and even identity.
Always take time to research your credit counsellor or agency properly. Make sure they hold a valid license to operate in Alberta, have no serious complaints made against them, and that you feel comfortable talking to them about your finances. Any good counsellor should give you a free consultation, should never insult or judge you, nor charge you any sort of fee before they’ve actually helped you.
Want to learn how to tackle your debt load all on your own? Check this out.
Setting Your Expectations
No matter where you sign up, you should also be sure to set your expectations appropriately. Although credit counsellors are often able to guide you through your financial turmoil and even administer certain solutions, they are not miracle workers and cannot simply make your problems disappear.
Before you decide on credit counselling in Lethbridge, it’s best to understand what you’re signing up for and that you yourself will have to put in most of the work in order to properly resolve the situation.
Courses, Programs, and Solutions in Lethbridge
Once you’ve chosen a certified credit counselling service in Lethbridge, it’s time to speak frankly with your counsellor and determine the best course of action. Maybe you have a spending problem or you’re dealing with a more serious legal situation as the result of massive consumer debt.
The courses, programs, and solutions you can access will vary from counsellor to counsellor and agency to agency in Lethbridge. However, traditionally speaking, most credit counsellors and agencies can refer you to, oversee and if necessary administer services such as:
- Lessons about budgeting, saving, and overspending
- Negotiations with creditors, debt collectors, and collection agencies
- Debt settlements
- Debt consolidation loans
- Debt consolidation programs
- Consumer proposals
How long does credit counselling take? Find out here.
The Potential Effect on Your Credit
Similar to any type of financial solution, it’s important to only enter credit counselling when you’re fully aware of the benefits and drawbacks that will potentially be involved. As we mentioned, one thing that can be both a benefit and a drawback is the impact that some counselling services can have on your credit.
Although none of the sessions you attend or advice you receive will have an effect, many of the programs and products a credit counsellor can refer you to will show up on your credit report and change your credit score, history, and rating for the worse.
Consider the Possible Consequences
For example, at your request, a credit counsellor can help you negotiate a debt settlement with your creditors, which is a type of agreement that allows you to pay off your outstanding debts through one large payment. If you provide reasonable proof of your inability to pay in full, you may even be able to settle for less than you actually owe.
Nonetheless, one of the biggest problems with a debt settlement is that it will be displayed in your credit history for several years and cause your credit rating to switch to an R7. If your creditor reports the debt as “settled” to Canada’s credit bureaus (TransUnion and Equifax), the situation will gradually reverse itself. However, if you don’t make your lump sum payment as agreed, the debt will remain unsettled and will quickly ruin your credit.
Since they can view your credit report when you apply for new credit, any of those negative consequences can lead to a lender declining your applications or charging you higher interest rates, neither of which is good for your credit. Once again, it’s better to only choose credit counselling if you’re struggling but still financially comfortable enough to handle the potential consequences that come your way.
Take a look at this infographic for more information about what affects your credit.
When to Seek Credit Counselling in Lethbridge
Admitting that you need help is not always the easiest thing to do, nor is credit counselling the most convenient or cost-free solution in the world. That being said, any service that you sign up for can be a huge step in the right direction, especially when your back is against the wall.
Then again, credit counselling isn’t right for everyone in Lethbridge. After all, the fees they charge may not be affordable or the service you need has too great of a negative financial impact for you to handle. Although it’s important to act quickly when your finances are on the line, it’s also essential to think things through properly and avoid any making any rash decisions.
Credit counselling may be the right choice if:
- You have problems making, saving and managing money.
- Your outstanding bill payments have gotten out of control and you wish to be debt-free.
- You’re now subject to late penalties, high interest, and/or legal issues as a result.
- You’ve fallen victim to fraud or identity theft.
- You have poor finances or bad credit and can’t get approved by lenders.
- You’re willing and prepared to deal with the potential negative consequences that may befall your finances and credit.
- You’d like to access, recover from, or avoid more serious procedures, such as a consumer proposal or bankruptcy.
For more information about how to tell if credit counselling is right for you, click here.
In Need of Financial Help?
If you’re currently struggling with credit or debt issues and are looking for the right solution, Loans Canada can help. We can match you with a wide variety of products and services in Lethbridge to get you and your finances back on track.