How To Locate a Good Credit Counseling Service

Approved Credit Counseling Agencies In Your State From the Website of the Department Of Justice, LIST OF CREDIT COUNSELING AGENCIES APPROVED PURSUANT TO 11 U.S.C. § 111:

http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm

Locating a Credit Counselor from the website of National Foundation Of Credit Counseling:

http://www.nfcc.org/FirstStep/locator.cfm

Whether you need a credit counseling service for making a budget plan or to enter a debt repayment module, choosing the right credit counseling service is vital to your goal. It is an unfortunate fact that many credit counseling services may be more interested in selling their own financial goals rather than helping you out with your bad debt situation. This would also include certain ‘non profit credit counseling organizations’. A report presented by the US Senate investigating committee in 2005 reported that “some new entrants to the industry, however, have developed a completely different business model – a ‘ for-profit model’ designed so that there non-profit credit counseling agencies generate massive revenues for for-profit affiliates.”

In contrast, the same committee applauded the National Foundation for Credit Counseling for following ethical and legitimate credit counseling services. National Foundation for Credit Counseling is known to provide many basic and common credit counseling services at no or very low cost to the consumer.

It is important to spot the difference between a legitimate credit counseling service and another. The very last thing that require when you are suffering from bad debt is to land your accounts in the hands of a credit counseling service that made to your credit rating more harm than good. Check the credit counseling service on the grounds of the following criteria and feel free to shop around till you locate one that provides satisfactory answers to your questions. By all means make the first appointment but do not go ahead with any further commitment to you feel that the counseling agency is legitimate and they are more interested in helping you meet your financial goals rather than earning money from you.

Learn more about  what you should and should not do when finding a credit counseling service to help you.

1) Is the credit counseling agency affiliated with the national bodies such as the National Foundation for Credit Counseling? To be affiliated to the NFC C, an organization needs to meet strict financial standards for Catholics and quality such as annual audits by an independent CPA, provision of written action plans for each consumer with the quarterly statements being delivered to the consumer who has entered into a debt management plan.

2) It is the credit counseling agency accredited by an independent third-party? Almost all credit counseling services will give themselves credit for providing essential and effective services. But what you are looking for is accreditation by a third party such as the Council on Accreditation ( COA). Such accreditation implies that the credit counseling service maintains appropriate balances and follows ethical repayment practices.

3) Is the credit counseling agency a 501 (c) (3) non-profit committee organization? Being a non-profit organization does not necessarily guarantee that the credit counseling service is a legitimate one. There are several non-profit agencies that serve as a front for a for profit service. But it will definitely help you shortlist the options.

4) Who sits on the Board Of Directors for the credit counseling agency? The board of directors for a credit counseling service should ideally comprise of a wide cross-section of the community. They should not be members of the family or employees that are paid by the agency. They should be people that represent the civic interests of the entire community.

5) What services does the credit counseling agency offer? Many credit counseling services take the approach of one solution fits all. This is not a good approach for helping different people out with their debt problem. The problem that people have when suffering from bad debt can be varied and different. Not everybody needs to enter the debt management plan whereas the implementation of a simple budgeting plan is not an option for many. Offering a variety of services such as budget counseling for those who are not in debt, debt counseling for those who may need professional assistance in interest renegotiation, housing counseling for free rental, pre-purchase, first-time house buyer, reverse mortgage and foreclosure prevention and the mandatory bankruptcy pre-filing counseling and pre-discharge education will ensure that the consumer finds the exact resources he needs to lighten his financial burden. Some credit counseling agencies also a sign minimum amount of debt beyond which they will not consider working with you. This is not a practice of a good credit counseling service.

6) What are the fees associated with the services provided by the credit counseling agency? It is common for credit counseling service to charges that the fee which is usually up to $50. No other fee should be charged up front before the service is provided. Many credit counseling services received payments from the creditors when a consumer enters into a debt repayment plan. The counseling service should be forthcoming about such facts. They should also be clear about whether or not they will negotiate with the creditors who do not pay them a percentage of the payments made to them.

7) What are the mediums of communication available for counseling? It is common for the first session to happen over the phone or the Internet over the e-mail. This proves to be very convenient as you can gauge the initial terms of the service. It is also convenient to conduct sessions over phone on the Internet if no counseling service can be found close to where you live.

8) Is the Councilor Assigned to You a Certified Consumer Credit Councilor? The credit Councilor that you work with should be put through the same test that you subject the counseling service to such as being accredited with the National Foundation for Credit Counseling. You obviously want to work with somebody who is qualified and has enough knowledge to provide you with the right solution to your credit problem. Being certified by the National Foundation for Credit Counseling means that the person has been put through rigorous tests to satisfactorily prove their financial knowledge.

9) Does the credit counseling agency provide educational classes workshops? A good credit counseling service will always seek to provide informative solutions and education to its consumer. A good credit counseling service serves the goal of the entire community by providing resources and advice rather than making money out of poor debt situation of others.

10) The council is compensated for writing Debt Management Plans? This is something that will not be so easy to find out. But a direct question make it to the information that you need. A legitimate counseling service does not give incentives to its councilors for writing debt management plans.

11) How long will you credit counseling session last? Do not try and skip on the time required for counseling sessions. For simple matters of writing a budgeting plan a couple of sessions that lasts about an hour each should suffice. But be ready for more sessions should your debt situation be more dire. Entering into debt management plans with the credit counseling service may take a little time to set into motion with continued involvement required over the months that renegotiation and repayment takes place with your debtors.

12) If you join a debt management plan how soon after receipt of your monthly payment would it be dispersed to creditors? This is a very tricky area. There are several mishaps that happen with the first payment that you make on a debt management plan that catch the consumer by surprise. Some agencies pocket the first payment and conspirator donation. Others make at a portion of the payments you make as a fee. Both of these instances will result in you missing a payment or paying more than what you thought you had agreed upon. The success of a debt management plan depends on timely, consistent and full

payments to the creditors. Confirm with the counseling service and get the same in written their policy for making payments under a debt management plan. The full amount that you pay should go towards the repayment of your debt and not as commission into the agency’s bank account.

13) How will your deposits be protected? It is just as important for the credit counseling agency to be bonded or ensured to protect the consumer from fraud or agency’s own financial difficulties.

14) Check out the credit counseling agency with Better Business Bureau. Checking an organization or a company with the better business bureau is the easiest thing to do online. All you have to do is go visit their website and type in the name of the counseling service. You will be able to see any and all complaints filed against them and how the agency worked to resolve them. If you have a complaint you can file it yourself. It is simple and anyone can do it. Also check with your state’s Attorney General to see therein impending complaints against the credit counseling service.

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