It seems that credit counseling agencies are a dime a dozen. You might see ads for so-called counselors on TV, on the local bus or scattered across town. But, how do you choose a counseling agency that has your best interests at heart and how do you separate the good counselors from the ones who are out to profit off of your troubles? There are a few things to look for in a credit counseling agency that let you know that it will do its best for you.
Status and Accreditation
One of the first things to look for in a credit counseling agency is nonprofit status. A nonprofit agency won’t be out there trying to make money off of you. Instead, its first priority will be to uphold its mission. To make sure the agency you’re considering hasn’t abused its status as a nonprofit, check to make sure it is licensed and accredited in your state.
Along with being an accredited nonprofit, the agency should be a member of an organization such as the Financial Counseling Association of America (FCAA). To become a member of the FCAA, an agency needs to maintain high standards of customer service and ethical conduct. The counselors who work for the agency should also be members of or accredited by an organization such as the FCAA or the National Institute for Financial Education.
You don’t want to pay a high fee for services before you know if a counseling agency will actually be able to help you. That’s why it’s a good idea to look for an agency that offers a free consultation or at the very least, offers a low-cost consultation. The consultation should be more than you introducing yourself to the counselor, too. Ideally, it will be an in-depth discussion about your unique situation. During your consultation, the counselor should dive deeply into your financial situation and get an idea of what you earn, spend, and owe, so that at the end of the call or in-person visit, he or she can recommend the best course of action for you.
A credit counseling agency should offer more than just one service. People’s financial situations aren’t cookie cutter or one-size-fits-all, and a legitimate counselor will know that. At the end of your consultation, a credit counselor might help you put together a budget and give you advice for sticking to it. If your situation warrants it, a counselor might recommend a debt management plan. Since debt management plans aren’t for everyone, be wary if that’s the only solution a counselor gives, particularly if he or she starts pushing a plan before he or she has taken a close look at your financial situation.
You don’t want a credit counseling agency that is very secretive or that will only give you information once you sign a contract. For example, if you do agree to sign up for a debt management plan, you want to get the information about the plan upfront. Find out how much it will cost you and what it will do for your credit. You’ll also want to know how long the payment plan will last, before you agree to it.
Another way to vet a credit agency before you work with them is to ask for referrals or testimonials. You want to work with an agency that has a good track record of actually helping people get out of debt.
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Consumer Education Services, Inc. (CESI) is a non-profit service provider of comprehensive personal financial education and solutions for all life stages and for all of life’s milestones. Our goal is enhanced economic security for everyone we serve.
CESI is NOT A LOAN COMPANY