Do you need credit counselling?

Let me start with identifying the symptoms that would help you recognize the need for credit counselling

• Rejection of a loan / credit card application

• Poor credit history

• Low credit score

• Cash strapped due to obligations

• Debt trap

Is your answer to any of the above symptoms a “YES”?

Undoubtedly most of us would believe that credit counselling is required when you face a credit problem or when you are in a debt trap. If this perception is correct – how true is the famous saying “Prevention is better than cure”? 

The relevance and importance of credit in an individual’s life has traditionally existed and is only increasing day by day. Credit Report and Score is considered to be an important tool by lending institutions for evaluating your credit application.

A poor Credit Report and / or Score can hinder your credit applications and result in a rejection.

Then why not be proactive and seek a credit counsellor’s guidance before falling into a debt trap?

So how can you decode this 6 letter word “credit” and rebuild your credit health? Whilst there is no quick fix to rebuild one’s credit health, it definitely can be improved over time.

A good credit counsellor would handhold you through your Credit Life Cycle and the entire process of restoring your credit your health by;

  • Creating awareness regarding credit

The credit counsellor, besides restoring your credit health through the services offered, would also provide knowledge on credit through free educational materials and workshops.

  • Analysing your credit health and guide you on the steps to recovery.

The credit counsellor would review your existing obligations and analyse the exact debts that are causing a dent in your finances. 

  • Evaluating your budget

The credit counsellor would evaluate your monthly cash inflows, outflows, contingencies and existing obligations and thereby determine how much free cash is available to eliminate debt.

  • Building an action plan

The credit counsellor would develop an action plan that would overtime, inculcate disciplined credit behaviour and make you a prudent borrower.

  • Handling your credit data with confidentiality

The credit counsellor would protect and handle your credit information with extreme confidentiality.

The objective of credit counselling is to provide guidance and handhold individuals who are in a financial stress and have burdened themselves with debt. Creating awareness and educating individuals on managing their finances also supplements their objectives.

So, if you have answered yes to any one of the above listed symptoms, approach a credit counsellor who would provide you end to end counselling and help restore your credit health.

About Author

Satish Mehta

Satish Mehta is a mortgage finance and credit information veteran with global and domestic experience of over 40 years. He runs a boutique consulting firm - Athena Advisors. He is a consultant to the World Bank Group and a Professor of Practice at the Ahmedabad University.