How to Choose the Right Credit Counseling Agency

How to Choose the Right Credit Counseling Agency

There are many counseling services that can help you get out of debt, provided you chose the right company for this task. In the Buzzle article below, you will understand how to choose the right credit counseling agency.
WealthHow Staff
Quick Tip
While choosing a credit agency, always check the previous record. Do not rush and choose an agency solely because it has been recommended by someone or because it has a good reputation.
Credit counseling service providers have increased tremendously in the past few years. During economic recession, a considerable number of people had lost their jobs and were not in a position to repay their huge debts. These people sought help of free credit counseling services to adopt ways of returning to prosperity. While some of them benefited, many did not. Thus, you need to think twice before you approach any credit counseling service. Many of these services claim to offer free counseling and charge their customers later. At times, identifying hidden charges becomes almost impossible. Therefore, preferably, go in for services that are not only reputed, but also have a good past performance track record. In the subsequent paragraphs, you will come across some tips on choosing the right service.
The Need of Credit Counseling Services
  • The aim of credit counseling services is to analyze your financial situation thoroughly, and to chalk out ways by means of which you can be debt free.
  • These agencies offer various financial planning tips. They will suggest ways of reducing your bills by efficient finance management.
  • Negotiating a deal with your creditors is the most important function. Now, you might think that you can personally go to your creditors and finalize a repayment schedule with them. However, it has been found that the chances of your creditors accepting your demands is quite less and the initiative taken by renowned credit counseling services can be the only help in this regard.
  • They can explain your inability of repaying the debt to your creditors and get your loan restructured. Under this scheme, you might get some more time to pay your debts successfully.
  • The interest rate burden might be reduced, and you might be asked to repay the loan with lesser interest rates, which in itself would be a big relief for you.
  • A majority of the reviews have been positive, and hence, you can definitely expect better returns when you approach agencies for help.
Tips to Choose the Correct Counseling Agency
Research
  • This is the first step for every major financial decision undertake thorough research.
  • To begin with, you might ask your close and friends and family about such agencies. Many of them might have been in a similar position, you can ask them about their experiences.
  • Reputed companies will provide information themselves; you can just walk in and get your queries resolved.
  • You will need to ask about their services, fees, qualifications, credit plans, etc.
  • Prepare similar questionnaires for at least 4 to 5 agencies, dig out and note down the answers systematically, and then make an in-depth comparison.
  • Make sure to check on the staff and their qualifications.
Accreditation
  • This is a mandatory point. The credit agency has to be an accredited one.
  • It has to be affiliated to either the Association of Independent Consumer Credit Counseling Agencies (AICCCA) or the National Foundation for Credit Counseling (NFCC).
  • It has to be accredited by the Better Business Bureau (BBB), the Council on Accreditation (COA), or the International Organization for Standardization (ISO).
  • Legally, the above requirements would suffice, but it would be better if the agency is licensed.
  • You may check if the agency is certified on the official website of the Department of Justice (DOJ).
Previous Record
  • This is another important pointer. You would understand this automatically while making inquiries.
  • Find out if the agency has a very long complaint list. A few complaints here and there may be alright, but if it has a string of dissatisfied customers, bid a strict adieu to the agency.
  • The previous track record must be clean; even if there have been complaints, make sure they have been resolved.
  • Check the reviews thoroughly. Make notes on how many positive and negative ones there are.
  • Check how the services have actually benefited, what changes have been made, etc. You can actually ask all these questions directly at the agency, as mentioned before.
Choose a Trusted Service
  • While undertaking research, you might have come across some agencies that seem to fulfill all possible criteria.
  • Some of these criteria includes a good reputation, hardly any consumer complaints, excellent services, great reviews, etc.
  • List down these services, and make an informed choice.
  • Check your employee assistance plan; it may offer low-cost debt counseling.
  • You may also go in for small agencies that offer such services; sometimes, they are better than the highly reputed ones.
Try Non Profits
  • Accredited non profits are known to offer credit counseling service.
  • They may or may not offer debt management plans or similar policies, but they can be reliable and trustworthy.
  • However, with non profits, make sure to check the history. Preferably, choose one that has been around for a long time.
  • Be warned though, they may charge you higher.
Check Fees
  • You need to check this one thoroughly.
  • Many agencies offer free service or demand reasonable fees.
  • As long as the services provided are correct and helpful, charging fees is not a problem.
  • There are many agencies though, which claim to be free, but charge consumers later.
  • For this reason, always, I mean, always put down everything on paper.
  • You need a notarized document that mentions every little detail about this deal - services, fees, etc.
  • If the agency demands huge fees, preferably reject it. It might be one of those agencies that offer huge promises but does nothing.
Services
  • The more the services offered, the better the agency is.
  • Your agency should be able to offer you the accurate advice for the current situation.
  • It should offer debt management plans, consumer protection, education, etc.
  • The counselor must be able to get creditors lower their interest, if not eliminate the same.
  • They need to help you in case you have problems in future.
Best Credit Counseling Agencies
  • CareOne Debt Relief Services
  • AAA Fair Credit Foundation
  • ClearPoint Credit Counseling Solutions
  • American Consumer Credit Counseling (ACCC)
  • Springboard
  • Money Management International
  • Alliance Credit Counseling
  • InCharge Debt Solutions
  • American Financial Solutions
  • Take Charge America
Free credit counseling services can help you establish good relations with your creditors again. You need to try your best and avoid bankruptcy, as it remains on your credit report for a long time. So, plan wisely and implement your plans for peaceful and financially secure living.