Choosing A Credit Counseling Agency

Category: Finance, Credit.

Are you barely making ends meet?

Unable to meet your monthly expenses much less save money for emergencies or retirement? Dodging debt collection calls? If this sounds familiar, you may want to consider credit counseling. It can help you get out of debt faster and improve your credit, just to name a few. Credit Counseling can improve many aspects of your life. And there are many agencies out there that would love to quickly enroll you in their Debt Management Program.

As with most things in life, if it sounds too good to be true, it probably is. However, not all agencies are created equal and not all agencies are truly looking out for your best interest. This article will outline some guidelines in choosing a credit counseling agency, what questions you should ask and a few warning signs that you may not be dealing with an ethical practice. Reputable credit counseling agencies advise you on how to realistically manage your money and your debts, help you develop a workable budget, and usually offer free educational materials and workshops. Choosing a Credit Counseling Agency. Develop your own list on the potential credit counseling agencies and the best way to check the reputability of those short listed credit counseling agencies is to check them with the Better Business Bureau at www. bbb. org.

Credit counselors should be certified and trained in the areas of consumer credit, money and debt management, and should discuss, and budgeting your entire financial situation with you, and help you develop a personalized plan to solve your money problems without pushing a debt management program. From they you will know how many complaints have been filed against these credit counseling agencies and for what reasons. Erase them from your list for those credit counseling agencies that keep pushing you to enroll into their debt management program without understanding first on your financial condition. Although many credit counseling agencies are nonprofit, there might be some fee involve. The Cost. Bottom line is whether they request" fees" or" contributions" , they should be disclosed and should be reasonable.

Make sure that the agency is not keeping the first month& #39. Anything over$ 50 for a consultation fee or monthly fee or contribution is NOT reasonable. S payment as their fee! What Questions To Ask? This is known as a bad practice in the industry and has been the source of state attorney general lawsuits as well as many individual actions against the agencies that do this. What services do you offer?

Avoid agencies that push a debt management plan( DMP) as your only option before they spend a significant amount of time analyzing your financial situation. Look for a credit counseling agency that offers a variety of related services. What educational materials/ information do you offer? Avoid credit counseling agencies that charge for educational materials or other written information. Is it free? What are your fees? Get a specific price quote in writing and make sure you understand exactly what fees you& #39.

Are there set- up and/ or monthly fees, how are they broken down? Ll be charged. T afford to pay your fees or make contributions? What if I can& #39. Under the terms of the Pension Protection Act of 2006, non- profit credit counseling agencies must provide services for free if a consumer is unable to pay. Are they accredited or certified by an outside organization?

What are the qualifications of your counselors? Use an organization whose counselors are trained by a non- affiliated party and who have a background in debt management, consumer credit and budgeting/ finance. Make sure the contract includes: Disclosure of the amount of your fee or contribution. Once you satisfied with their answers given by the credit counseling agency and decide to take up their service, remember to get a copy of the contract and review it carefully before you sign it. Description of the services to be provided. Disclosure of the termination provisions of the agreement. An estimate of the payoff schedule for the debts.

Options for resolution of disputes. Finally, you should be aware of a few warning signs on unethical practice. Warning Signs. Get alert with these signs when you interviewing an agency: Unrealistic Low Monthly Payments. Loan Programs. Money Back Offers.

If the promises being made seem like they& #39. Beware. Re too good to be true, they probably are. Summary. Now you must make the next big step and choose the Credit Counseling Agency that is best for you. You have made the first step towards reaching financial freedom.

Remember, you want to work with an agency whose goals are in line with yours, NOT theirs.

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