Who Can Help You Manage Your Debt?

Getting out of debt is no easy task. Sure, you could spend less and earn more; but that’s not where most people find themselves. Instead, it takes a lot of hard work and commitment to make the problem go away.

On some occasions, you might even find yourself needing professional help in the form of credit counselling.

What Is Credit Counselling and How Does It Work?


This is when you engage a third party to help negotiate with a bank to deal with your debts. When you find that you cannot cope with your current monthly debt payments, it is time to find for help.

In some cases, you could potentially talk directly to your bank to get this done. This works if you only have a single large debt that you want to restructure. However, if you are having problems dealing with multiple loans from several different sources, sometimes getting professional guidance might be the answer.

Malaysians are fortunate to be able to turn to the services of a credit counselling agency set up by Bank Negara Malaysia, the Credit Counselling and Debt Management Agency (AKPK).

The first step in using a credit counselling agency to deal with debt is to sign up for a programme. In the case of AKPK, it’s their Debt Management Programme (DMP). You will then be asked to provide details about your income levels, debt, and expenses. This is all so that the agency will be able to come up with a plan to help you.


Once this is done, you will have to schedule an appointment with a counsellor who will go over the plan with you.

Basically, the plan will involve consolidating your debts into a single payment schedule. It does not reduce the total amount you need to pay, but it will adjust how much you are paying each month. That said, the length of time you will need to settle the debt may also be extended.

Your credit counsellor may also provide you with a monthly budgeting plan. Getting help to manage your finances in order to get your life back on track is the right step but be prepared to make some difficult lifestyle choices or changes to stick to the plan.

Should You Use AKPK?

While this sounds easy enough, there is a reason that getting over debt is considered a difficult prospect.

In the case of AKPK’s Debt Management programme, the individual will have all his lines of credit withdrawn and will not be allowed to take on new credit. In simpler terms, it means that you will have to cancel all your credit cards, lose the ability to make bank overdrafts, and cannot apply for new loans or credit cards.

This lasts until your debt is completely paid off. This move has far-reaching implications and is something that needs to be considered carefully if you’re going to take a long time to finish paying it off.

AKPK is an agency run by Bank Negara Malaysia; as such it operates as a non-profit and doesn’t charge for its debt counselling service. This is probably a good thing for people trying to get out of debt. It wouldn’t be helpful if you had to pay for a service that is trying to get you to save money.

This differs from credit counselling services in other countries where they do have charges for helping their customers restructure their debts.

There is no reason to avoid asking for advice, especially if you are barely making your monthly installments. After all, there is no point in constantly paying off your credit card interest without addressing the principal amount.

If you are in the unfortunate position of having a low credit score due to many missed payments and looking to climb out of that hole, there is no better agency to contact. They will deal with the banks for you and restructure your debt into something manageable.

It won’t be fixed overnight, but it could provide you with the direction necessary to become financially healthy.

What Is the Impact on Your Credit Score?

To make it clear, seeking the help of a credit counselling agency will not have a negative impact on your credit score. However, it will appear as a note from CCRIS; letting financial institutions know of your status.

In the case of AKPK, this means that you stand a high chance of being denied approval for new loans or credit cards; regardless of what your actual credit score is.

However, sticking to the plan will eventually raise your credit score. This is because your payment history has the most weight in calculating your score, and you should be making consistent payments over the course of the agreement.


A credit counselling service does not directly impact your credit score, but your actions after seeking help do.

Of course, you will also want a way to keep track of your credit score every three to six month to see it improving. After all, you want visible proof that what you are doing is working.

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