Credit Counselor
Choosing a Certified Credit Counselor
Or Credit Counseling Organization that is right for You...
- Living paycheck to paycheck?
- Worried about debt collectors?
- Can't seem to develop a workable budget, let alone save money for retirement?
If this sounds familiar, you may want to consider the services of a Credit Counselor or Credit Counceling Organization.
What is Credit Counseling - Professional counseling provided by organizations and individual credit counselors, to help over extended debtors find ways to pay off their debts. People usually use a Credit Counselor as a last resort, once they realize the seriousness of their debt problem. Credit counselors advise their clients in careful budgeting, money management and fiscal responsibility.
Credit counselors may also negotiate with creditors to have them waive charges for late payments, extend the term of the loan and lower interest rates, in an attempt to enable the client to come to grips with their debt load.
The following article, "Choosing a Credit Counselor" is courtesy of the Federal Trade Commission.
Choosing a Credit Counselor
Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But beware - just because an organization says it is "nonprofit" doesn't guarantee that its services are free or affordable, or that its services are legitimate. In fact, some credit counseling organizations charge high fees, some of which may be hidden, or urge consumers to make "voluntary" contributions that cause them to fall deeper into debt.
Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.
Credit Counseling Organizations
Reputable credit counseling organizations advise you on managing your money and debts, help you develop a budget, and usually offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.
A reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a firm doesn't do that, consider it a red flag and go elsewhere for help.
Once you've developed a list of potential counseling agencies, check them out with your state Attorney General, local consumer protection agency, and Better Business Bureau. They can tell you if consumers have filed complaints about them. (If they don't have complaints about them, it's not a guarantee that they're legitimate.) Then, it's time for you to interview the final "candidates."
Questions to Ask
Credit Counselor or Counceling Organization...
Here are some questions to ask to help you find the best credit counselor or credit counseling organization for you and your specific circumstances!
What services do you offer?
Look for an organization that offers a range of debt and financial management services, including budget counseling, and savings and debt management classes. Avoid credit counceling organizations that push a debt management plan (DMP) as your only option before they spend a significant amount of time analyzing your financial situation.
Do you offer credit counceling information? Are these educational materials available for free?
Avoid organizations that charge for credit counceling information.
In addition to helping me solve my immediate credit or debt management problem, will you help me develop a plan for avoiding credit problems in the future?
What are your fees? Are there set-up and/or monthly fees?
Get a specific price quote in writing.
What if I can't afford to pay your counceling fees or make contributions?
If an organization won't help you because you can't afford to pay, look elsewhere for help.
Will I have a formal written agreement or contract with you?
Don't sign anything without reading it first. Make sure all verbal promises are in writing.
Are you licensed to offer your services in my state?
What are the qualifications of your credit counselors? Are they accredited or certified by an outside organization? If so, by whom? If not, how are they trained?
Try to use an organization whose credit counselors are trained by a non-affiliated party.
What assurance do I have that information about me (including my address, phone number, and financial information) will be kept confidential and secure?
How are your credit councelors (employees) compensated? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization?
If the answer is yes, consider it a red flag and go elsewhere for help.
Last Word on Choosing a Credit Counselor to Help Solve Your Financial Problems...
There you have it, good advice and common sense guidelines for anyone living paycheck to paycheck, worried about debt collectors and unable to develop a workable budget on their own, let alone save anything for a future emergency or retirement.
Help is available in the form of Professional Credit Counseling, Debt Management Plan or Debt Negotiation Program, but remember, if it sounds too good to be true, it probably is.
If you find yourself in this or similar situation, you truly may want to consider the services of a credit counselor or credit counceling organization or DMP near you!
Learn the advantages and the risks of Debt Management Plans (DMP) and Debt Negotiation Programs as alternatives to Professional Credit Counseling!
Review the newest changes to United States Bankruptcy Law, and how they effect the need for Certified Credit Counselors.
