Credit counseling is needed by all those individuals whose monthly expenditure is higher than their income. Most of these individuals use credit cards with abandon but don’t know what to do when the monthly statements arrive.

They need the assistance of companies that can help them clear their debts, and also advise them of the ways to manage their debts. However, even these companies can do little if the individuals continue to splurge. The cornerstone of any counseling is financial discipline. The individuals have to learn to curb their instincts.

How can you know when it is time to turn to a credit counseling company? You may consider the following:

_ if you are unable to keep up with the minimum payments on your credit cards

_ if you pay at least one of your bills late on a monthly basis

- When they start getting hounded by collection agencies

_ if creditors are unwilling to offer you any more help.

If any of these indicators are true in your case, you are in a dangerous spot. Even so, the decision of which company to choose should not be taken lightly. It is a serious decision as there are many unscrupulous persons looking to take advantage of you. You should make sure that any company you are looking to work with is registered with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

Be careful of firms that demand high set up fees. Also monitor if the payments that you make to these firms are actually being channeled to the creditors or not. There have been cases when counseling firms have taken the payments from an individual but have not passed it on to creditors. Even when they have done so, they have done it late.

If a company makes claims that appear to be too good to be true, beware. There is no magical way to resolve all of your debts. Legitimate companies will not make everything appear to be a walk in the park. They will be honest with their clients as to the results of looking for lower interest rates at which to pay back their debt.

They will not hide the prospect of an individual’s credit rating getting a knocking as a result of the debt repayment plan drawn up by them. The individuals must remember that it is better to have a lower credit rating than a negative rating on account of bankruptcy. Remember bankruptcy is a black mark that will stay on an individual’s file for a decade.

Many creditors will be very happy to find out that you are seeking counseling. They see it as a very positive move towards the goal of clearing yourself of your debts.