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How To Choose a Good Credit Counselor
Choosing the right credit counselor can make a huge difference in your
debt consolidation experience. Reputable credit counseling agencies are
able to negotiate lower interest rates and repayment plans. However,
others charge big upfront fees, disconnected their phones and then
disappear.
If you are considering going with a credit counseling service, be
aware of the possible problems.
Many of these agencies focus their activities on
making a profit rather than looking out for your best interests. For
this reason, only work with an agency that has a
good reputation with a long list of satisfied clients.
What to Look for in a Credit Counselor
When shopping around for a consumer credit counseling service, investigate the company or service carefully
and use the following guideline for
your evaluation before signing up:
- List of satisfied clients. The company has list of testimonials from satisfied clients. If they do
have, ask the company for referrals from people who've used them. You
may contact them to know their opinions about the firm. Additionally,
you may want to check with the Better Business Bureau in their area.
- The agency is insured. The agency is bonded or insured, so you are protected against the agency
closing down.
- Ability to work with your creditors. Some creditors will not work with credit counseling services, preferring to deal directly with you. But your
credit counseling company should be willing to work with all companies.
Be careful with companies that prefer only to work
with creditors from whom they receive some form of profit.
- Ways to pay your creditors. The entirety of the money you pay to go towards your creditors isn't
actually going towards your creditors. Some companies take a $15-20 fee
off the top of your payments, which will make your payments take longer.
Some companies even take your entire first month's payment as a fee,
which will damage your credit score.
- Pay your creditors on time. Successfully paying off all of your debt
requires on time payments every month. If your debt management plan
holds on all or part of payments, then your credit is going to be damaged and your debt is
going to take longer to pay off.
- Don't push you to enroll in a debt management program. Not everyone needs a debt management plan. At times, all you need is
someone to help you sort out all of your creditors and make a plan,
which may only take an hour of a full counseling session. From this
session you will discover whether the firm is actually want to
help you or just want to catch you in a program that you don't need.
Finding a Good Credit Counselor
As with other purchases, be aware of some
credit counseling services
that making magical promises. If it sounds too good to be true usually
it does. No company can magically settle your debts for little or no
money, without hurting your credit rating, or make
things on your credit report disappear.
To ensure that the agency meets certain standards for quality, it may be best to select a credit
counseling company which belongs to a nationally accredited institution, The National Foundation for Credit Counseling (NFCC).
Fixing credit score and paying off debt are something that can't be done overnight; it takes your
time, planning, and persistence. So, only work with a credit counselor
that can meet all of the requirements.
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