Even if you’re a good saver with a steady job and a decent income, it’s still possible that you’ll experience some kind of financial turmoil throughout your lifetime, particularly if you live in an urban area, like Hamilton. Since being subject to a relatively high cost of living can add a lot of debt on your plate, it’s best to seek help before the going gets too tough.
This is where Credit counselling in Hamilton can help. A professional service that can help any resident regain control of their finances and achieve their goals. Keep reading to learn even more about why credit counselling could be the right choice for you.
How to tell if credit counselling is the right option for you? Check this out.
What Credit Counselling Can Do For You
Although credit counselling isn’t something that everyone needs, it’s certainly available to anyone that wishes to give it a try.
After all, a good credit counsellor can:
- Give you lessons about budgeting and wealth management
- Help you avoid and recover from various financial emergencies
- Teach you how to improve your credit score and credit report
- Negotiate with creditors and collection agencies on your behalf
- Connect you with a product or procedure that helps reduce high-interest debt, such as a:
- Debt consolidation program
- Debt consolidation loan
- Debt settlement
- Consumer proposal
- Bankruptcy
With all this in mind, it’s essential to understand that credit counsellors are not miracle workers and cannot simply make your financial problems evaporate. You will need to put forth most of the effort in order to see positive results during the process. If you are prepared to do that, credit counselling may well be your best option.
How to Find the Right Credit Counselling Service
In Hamilton, there are sure to be a few good credit counsellors or counselling agencies that will happily take you on as a client. That said, not all of these services are the same, so before you sign up, it’s important to research to confirm that the organization is reputable and has your best interests in mind.
Be Wary of Possible Service Charges
For instance, while many credit counselling services are non-profit, others may charge you some service-related fees once they’ve helped you or you’ve entered one of their programs. Though this is not necessarily a problem, you should still budget for these fees appropriately.
Nevertheless, no matter who your counsellor ends up being, a basic consultation should be free, so make sure to avoid them if they seem to charge unreasonable fees for otherwise unhelpful advice, products or programs.
Confidentiality is Key
A professional credit counsellor should always be discreet with any information you disclose to them and never judge you based on your financial problems. They should not share your personal profile with anyone outside of the agency, unless you’re involved with some kind of legal procedure, such as a bankruptcy.
Even if they happen to be a for-profit organization, a legitimate counselling service should not demand your credit card number or access to your bank accounts, at least not until they’ve properly helped you. If all they seem interested in is how you plan to pay them, it’s another surefire sign that you should stay away.
Make Sure They Are a Valid Business
As a professional business, a credit counsellor or agency should also be ready to display a valid license to operate in Ontario, as well as other credentials that prove their legitimacy. While some counsellors/agencies offer online services, they must also have a physical address that you can visit and, if necessary, report to the authorities.
During your research, look at customer reviews and complaints, check to see that they are listed with the Better Business Bureau and are known to have a reasonable rate of success. In other words, the more well known they are and the more of a positive reputation they have, the safer it will be to sign up with them.
Watch Out For Scams
Unfortunately, the idea of credit counselling is one that can attract a lot of scammers, fraudsters and identity thieves, being that a large portion of the potential clients are in need of financial help. Desperation can cloud your judgement can cause you to make rash decisions, so remember to take some time and think about who you may be giving your personal/financial information to.
That said, if you stay patient, proceed cautiously, and keep an eye out for the warning signs mentioned above, you should have no problem avoiding a scam and finding a legitimate credit counselling service to help with your situation.
The (Possible) Impact on Your Credit
Another thing you should watch out for when it comes to credit counselling in Hamilton is the impact that this service may have on your credit. This notion can be a tad confusing, since any lessons or advice receive won’t affect your credit at all.
However, many of the products and debt solutions that a counsellor can connect you with could have either a positive or negative impact on your credit health.
Example: Debt Consolidation Program
To get a better idea of what we mean, let’s use one of the simplest, least impactful solutions a credit counsellor can help you enter; a debt consolidation program (for more information about this program, click here). In this case, the counsellor would reach out to your creditors and negotiate a deal that, when approved, allows you to repay your outstanding debts through monthly installments.
The Effect
While this can drastically reduce the amount of interest you’re paying overall and should end any further debt collection penalties that you’ve been subjected to, it will also leave a black mark on your credit history. On top of that, any related credit accounts will be assigned the third worst credit rating of R7 (Do you know the difference between your credit rating and score? Find out here). This whole negative effect can last for several years, even after you’ve finished the program.
During that period, if your were to apply for a new loan, your potential creditor may examine your credit report, see these red flags, assume that you will not be responsible with your upcoming debt payments, and reject your application. If you are approved, it will only be for a small loan with a high interest rate and an unadjustable payment plan.
What’s more, this would lead to hard inquiry being added to your credit history, which will decrease your credit score by a few points. This will, of course, be more of a problem when you have bad credit and are therefore more prone to getting your applications denied all over town.
Stay Positive
Even with all this new information on the table, it’s important to maintain a positive attitude when it comes to choosing credit counselling in Hamilton. Despite the negative impact that such programs can have on your credit, there is a silver lining.
For instance, although that same debt consolidation program would tarnish certain parts of your credit report, any assigned payments you complete will elevate your credit score over time. If you keep up this responsible behavior, eventually your debt consolidation program will no longer be visible on your credit report. The situation will then reverse itself until your creditworthiness is back to a healthy status.
Take a look at this infographic to learn about what else affects your credit score. When to Seek Professional Help
While credit counselling is a service that anyone can access in Hamilton, it’s definitely more essential if you’re currently experiencing problems with money management, ongoing debts, collection harassment, or worse. Essentially, whenever the option is available, it’s best to seek professional aid before it’s too late.
Credit counselling might be your best alternative when:
- You have trouble saving your money or creating a realistic budget
- You’re a recent victim of a scam, fraud, or identity theft
- You’re trying to deal with or recover from a financial emergency
- Your credit is getting worse every day due to unpaid debts
- Creditors and collection agencies will not leave you alone
- You cannot manage your outstanding debts by more conventional means (i.e. credit cards, traditional loans, borrowing, etc.)
- Your debts are so serious that you’re now considering filing for a consumer proposal or bankruptcy
Don’t Wait, Try Credit Counselling Today
Whether you’re having trouble managing your debts or would just like some financial advice, Loans Canada offers a wide variety of products and services that can help anyone in Hamilton get back on track.
