Choosing a Consumer Credit Counseling Service
Are you living paycheck to paycheck and worried about debt collectors? Have you had a hard time developing a workable budget, let alone save money for retirement? If this sounds familiar, you may want to consider a consumer credit counseling service. Many credit counseling organizations are nonprofit and work with you to solve your financial problems.
Reputable consumer credit counseling services 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 service will normally send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a firm does not do that, consider it a red flag and go elsewhere for help.
Once you have 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. But even if there are no complaints about them, it is not a guarantee that they are legitimate. It is imperative that you take the time to research a service before you commit to them.
Unfortunately there are some organizations that offer their services for free only because they are rip off companies. Avoid organizations that push a debt management plan as your only option before they spend a significant amount of time analyzing your financial situation. Avoid organizations that charge for information. If an organization will not help you because you can not afford to pay, look elsewhere for help.
Good companies are out there and here are some tips on what you should look for when choosing a consumer credit counseling service to help you. It is best to look for an organization that offers a range of services, including budget counseling, and savings and debt management classes. Their educational materials should be available to you for free. They should be able to give you a very specific price quote for their services and this should be in writing.
You will also want to find out if they are accredited or certified by an outside organization and if so, by whom. If not, how are they trained? It is best to use an organization whose counselors are trained by a non-affiliated party. You will also want to know if they are paid more if you sign up for certain services, if you pay a fee, or if you make a contribution to their organization. If the answer is yes, consider it a red flag and go elsewhere for help. Finally, do not sign anything without reading it first, and make sure all verbal promises are in writing.
Filed under: consumer credit counseling
