Because credit and mortgage issues are intertwined, it is little surprise that you may need to get credit counseling because of the situation with your mortgage loan. Especially in cases where homeowners are in danger of foreclosure, credit and mortgage counseling is usually recommended.
Credit Counseling for Your Mortgage
If you are at risk for foreclosure, you could be eligible for one of the homeowner programs offered by the U.S. federal government. You may be able to take advantage of a mortgage refinancing or loan modification program, or employ other measures to avoid foreclosure. Note that homeowners are generally required to go through credit counseling in order to qualify for these government alternatives. [See related article "The Home Affordable Refinance Program (HARP)"]
Credit counseling programs are designed to help you get your finances back on-track. The credit and mortgage counselors work with borrowers to help them plan a budget and teach them how to use credit more wisely. These types of educational programs are good resources for homeowners facing foreclosure.
Choosing a Credit and Mortgage Counseling Program
It is important that you choose carefully when picking a credit counseling program. This is because there are a number of scam artists trying to cash-in on the foreclosure crisis. Some of these “counselors” will promise to raise your credit score and resolve your foreclosure issues, but they do little more than charge high fees and disappear. Other scams are structured to obtain your personal information and then use it without your knowledge (i.e. identity theft). [See related article “Beware of Bank Foreclosure Scams”]
As you look for a credit and mortgage counseling program, you may want to consider starting with counselors that are approved by the government. There are some “foreclosure prevention programs” offered through the U.S. Department of Housing and Urban Development (HUD) which include lists of approved credit counseling agencies. It is a good idea to make use of these suggestions as you begin your search since you know they’re legitimate. [See related article “Where to Get Bank Foreclosure Help”]
Other things to consider as you pick a credit and mortgage counseling program are the fees, appointments, and quality of information you receive. You want a counselor who is knowledgeable and who you feel comfortable with. You may also consider asking for referrals from your mortgage lender, as well as family members and friends. Taking part in credit counseling is one of the best ways to sort through your mortgage situation and get your finances back together.