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Choosing A Consumer Credit Counseling Agency

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(credit: Thinkstock)

(credit: Thinkstock)

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screen shot 2013 12 20 at 12 20 13 pm Choosing A Consumer Credit Counseling Agency

This article is provided and sponsored by:
ClearPoint Credit Counseling Solutions
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Living paycheck to paycheck? Worried about debt collectors? Can’t seem to develop a workable budget, let alone save money for retirement? If this sounds familiar, you may want to consider the services of a nonprofit consumer credit counseling agency. But all agencies aren’t created equal, and some can pose risks to consumers, even if the agency is labeled as a “nonprofit.” Thankfully, there are steps you can take to ensure you receive quality credit counseling service.

Most credit counselors offer services through local offices, the internet, or on the telephone. Some people prefer face-to-face counseling, but choose what is right for you. Your financial institution, local consumer protection agency, and friends and family may also be good sources of information and referrals.

Reputable consumer credit counseling organizations advise you on managing your money and debts, help you develop a budget, and usually offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

A reputable consumer credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a firm doesn’t do that, consider it a red flag and go elsewhere for help.

Once you’ve developed a list of potential consumer credit counseling agencies, check them out with your state Attorney General, local consumer protection agency, and the Better Business Bureau. They can tell you if consumers have filed complaints about them.

After you’ve done your background investigation, it’s time for the most important research – you should interview the final “candidates.” Here are some questions to ask to help you find the best consumer credit counseling agency for you:

  • What services do you offer?  Look for an organization that offers a range of services, including budget counseling, and savings and debt management classes. Avoid organizations that push a debt management plan (DMP) as your only option before they spend a significant amount of time analyzing your financial situation.
  • Do you offer information? Are educational materials available for free? Avoid organizations that charge for information.
  • In addition to helping me solve my immediate problem, will you help me develop a plan for avoiding problems in the future?
  • What are your fees? Are there set-up and/or monthly fees? Get a specific price quote in writing.
  • What if I can’t afford to pay your fees or make contributions? If an organization won’t help you because you can’t afford to pay, look elsewhere for help.
  • Will I have a formal written agreement or contract with you? Don’t sign anything without reading it first. Make sure all verbal promises are in writing.
  • Are you licensed to offer your services in my state?
  • What are the qualifications of your counselors? Are they accredited or certified by an outside organization? If so, by whom? If not, how are they trained? Try to use an organization whose counselors are trained by a non-affiliated party.
  • What assurance do I have that information about me (including my address, phone number, and financial information) will be kept confidential and secure?
  • How are your employees compensated? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization? If the answer is yes, consider it a red flag and go elsewhere for help. 

These questions should help you evaluate the legitimacy of an organization and will give you an idea of what to expect from their services. To learn more about credit counseling, visit ClearPoint Credit Counseling Solutions.

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