About Credit Counseling
How to Choose a Debt Counselor
If you are having difficulty living within a budget and your debts are building, you may be considering credit card debt counseling. Many debt counseling companies claim to be “nonprofit” but that doesn’t mean that they are free, affordable, or even ethical. Some debt counseling companies charge extremely high fees, and the services they offer has even come under scrutiny. There have been numerous scams in recent history–enough to warrant taking pause to consider whether they are even worthwhile.
Some universities, military bases, credit unions, and housing authorities operate non-profit credit counseling programs. Basically, a reputable credit counseling organization will counsel you on how to best manage your money and your debt. They will help you develop a budget, and offer you educational materials and workshops. The counselors should be trained and certified in consumer credit, debt management and budgeting. They will help you to develop a personalized plan, given your entire financial picture.
You want to make sure that they offer a range of services, including budget, savings and debt counseling. You want to be sure they will work with you to develop a workable plan for the future. You’ll want to know up-front, if there are any fees involved and what those are, including any set-up or monthly fees. Make sure you get the quote in writing. All educational materials they supply should be free to you. Don’t sign anything without reading it first. Make sure, if they give you any promises, that they are in writing! You want to make sure that they are licensed to provide services in your state, and you need to inquire as to the qualifications of their counselors. Also, if they reward their employees with bonuses or special compensation for getting customers to pay a fee, make a contribution, or sign up for any special programs, that is a big red flat and you need to move on. It is very important that you ensure that your information will be kept secure.
Before utilizing the services of a counseling agency, make sure to check them out with your state Attorney General office, local consumer protection agency and Better Business Bureau. You can find out if their have been complaints filed against the business you are considering dealing with. This doesn’t mean they are legitimate, reputable, or will provide a good service for the money. It just means no one has yet filed a complaint.
If your financial problems stem from too much debt, the debt counseling agency may recommend that you enroll in a debt management plan, as part of the overall plan to help you move forward.