What Is Financial Help?

Financial help generally comes in two forms: professional help and self help. The type of help you need depends on the depth of your debt. If you have fallen behind on payments and feel like you're just watching your credit score slip further and further into the abyss, it may be time to seek professional counseling. Otherwise, you may be able to tackle you debt alone once you've created a plan of action.

Professional Help

When you default on payments to your bills, you severely damage your credit score. One late payment may drop your score by as many as 110 points. It's wise to seek professional credit counseling when you're at the point of damaging your credit score to this extent. By helping you to create a budget and presenting you with options for eliminating your debt, a good credit counselor will help to alleviate your stress levels by identifying solutions. Some options a credit counselor may present you with are debt settlement, debt management plans or even bankruptcy. The benefit to working with a credit counselor rather than attacking your debt alone is that the counselor will be able to explain all the details of your options in depth and help you to decide which one is right for you.

Self Help

Stopping the debt cycle before it severely impacts your credit is the best way to ensure that your score stays healthy and that your report is free of notes that could hurt your chances of obtaining future credit. To pay off your debt, you need to carefully choose a plan of action that will work with your own mode of motivation. Are you motivated by saving money? Then you may choose to pay off the debt with the highest interest rate first, so that you save on the interest that would otherwise build up on your balance. Do you need to see the fruits of your labors early to stay motivated? If so, using the "debt snowball plan" of paying off your smallest debt first may be more effective for you.

Financial Planner

Perhaps the financial assistance you require isn't about debt, but about growing the money you have. If so, you may want to turn to a financial planner. The services provided by financial planners vary widely, from managing your entire financial estate (savings, investments, insurance, taxes, estate planning and retirement) to those who simply provide investment recommendations. CNN Money recommends hiring a financial planner with credentials, such as the Certified Financial Planner or Personal Financial Specialist designations. Interview several planners, and make sure you're clear on how each is paid. Know exactly what services you need before interviewing any financial planners.

Warnings

Many companies advertising "quick and easy" options for financial help are not what they seem. For example, debt-settlement companies often end up charging clients such high fees and damaging their scores so badly that the clients would have been better off without the services. To get professional help with your debt, look to the National Foundation for Credit Counseling website, which will help you find a reputable credit counseling organization in your area. The Certified Financial Planner Board of Standards website will help you to locate a Certified Financial Planner in your area (see Resources).