Choosing a Good Consumer Credit Counseling Service

researching consumer credit counseling companiesIt’s important to choose a reputable credit counseling organization to advise you on financial matters. There is no definition regarding what makes an agency better than others, but there are signs that consumers should look for when interviewing organizations. The expectation when entering this type of relationship is that the counselors will help you manage your money and your debts responsibly. You’re going to count on these individuals to help you develop a budget, and educate you on how to be fiscally responsible. If you don’t choose a reputable organization, you may not learn valuable lessons, which won’t help you manage your money the way a better counseling agency would have. As a worse case scenario, choosing the wrong company to help you with your money problems could actually make your situation worse. Fortunately, there are ways to tell who you should trust and who you shouldn’t.

What Makes a Credit Counseling Service Reputable?

A good consumer credit counseling agency will employ counselors that are trained and certified in financial matters such as consumer credit, debt management, money management, and budgeting. Advisors will discuss a customer’s entire financial situation with them in detail. After examining all aspects of a person’s financial history, a credit counselor can help consumers deal with debt and money problems. Usually, the first counseling session lasts about an offer. In most situations, there will be a few follow-up sessions involved to finalize a consumer’s plan.

When considering which credit counseling agency, you should use, you should consider how you found about an agency and what information a company asked of you to be considered for their services. A reputable credit counseling service will offer free information about their services and their commitment to consumers. Additionally, the agency shouldn’t require any information from you to provide you with details about what they do. If a firm doesn’t offer free information about themselves and requires you to divulge personal or financial information before they will consider working with you, you should take that as a red flag and look for another agency to help you.

How Much Will Credit Counseling Cost?

Many credit counseling agencies work on a non-profit basis. If fees are charged for services, the cost is usually minimal. Once you’ve gathered a list of organizations you are interested in partnering with to ease your financial burden, you should make sure to check them out. One good place to start is with your state Attorney General’s website. Another good online review to check out would be with a local consumer protection agency. Lastly, the United States Trustee Program keeps an up-to-date list of credit counseling agencies that are certified to provide consumers with pre-bankruptcy counseling.

When you visit these sites, you will be able to tell if other consumers have filed complaints against a certain company. If there are many unresolved complaints, you should cross that prospect off your list. However, you should be just as weary of an agency that has no reviews.

The best agencies will probably have a mix of good and bad reviews. Not everyone will always have the same experiences and sometimes reviews are fueled by emotions more than facts. The good thing is if you do enough research, you’ll be able to pick out the real reviews from the negative and you’ll have a good feel for what companies are legitimate and which aren’t. When you have your “short list” in front of you, you’re ready to start interviewing agencies and narrowing your list down to one agency.

What Services?

Ideally, you want to choose an agency that offers many financial services including counseling, workshops, and classes. It’s a good idea to stay away from a credit counseling agency that pushes a debt management plan (DMP) before they spend time with you analyzing your situation.

Are Educational Materials Available? Are they Free?

Many non-profit agencies get huge portions of their budget through donations and grants. Non-profit organizations usually offer educational materials to clients for free. As a rule, debtors should avoid any company that charges for educational materials. After all, you’re trying to save money – not spend more.

Short Term or Long Term Solutions?

Becoming financially responsible requires patience and persistence. When choosing a company or agency to help you solve your money problems, you want to know what your short term and long term options are. For instance, if they can help you avoid garnishments and other collection activity quickly, what can they do to help you in the long run? You’ll want to choose a company that can help you do both.

Ask for Transparency in Fees

When working with an agency to help you with money problems, you need to make sure you understand how much you are paying for this assistance. Many companies have upfront costs, monthly fees, set-up fees, etc. Consumers need to ask about a company’s fees and get a detailed list of the costs in writing. It’s important to get a list of costs before enrolling in a program.
If you cannot afford to pay the fees, don’t despair. Many agencies will provide you with assistance even if you can’t afford to pay. If a company refused to help you manage your debt because you can’t afford the fees, it’s a sign that you should move on. Don’t stop looking until you find an agency that will help you regardless of your ability to pay fees.

Require All Details in Writing

When working with a credit counseling agency, you must read all paperwork before signing anything. It’s important to ask questions about anything you don’t understand and make sure all verbal promises are included in the paperwork. If something was promised to you but isn’t wrote down anywhere, there is no guarantee that the company will provide you with it.

Company Accreditation and Counselor Qualifications

Another important aspect you should consider when choosing a company to work with is the counselors and company’s accreditations. What accreditations does the company have? What are the qualifications of the counselors? The best counselors receive training by a third, non-affiliated party.

Recommended Credit Counseling Services in the United States

Consumer Credit Counseling Service of San Francisco
595 Market St.
San Francisco, CA 94105

Transformance
8737 King George Dr #200
Dallas, TX 75235

Consumer Credit Counseling Service of Orange County
27412 Calle Arroyo inside Community Health Enrichment Ctr
San Juan Capistrano, CA 92675

Consumer Credit Counseling Service of Rochester
1000 University Avenue
Suite 900
Rochester, New York 14607

AAA Fair Credit Foundation Credit Counseling Service
3104 Wood Office Plaza
Salt Lake City, UT 84101Royal

 

To learn more about credit counseling, read our full guide here.