The Do’s and Don’ts of Credit Counseling

Everyday more and more people are waking up to bad credit. It’s practically an epidemic these days. To help relieve the financial burden of their growing debt, people are turning to credit counseling services. Before you decide to jump on this bandwagon, there are some things you should consider first.

There are literally thousands of credit counseling companies that are just waiting to scam you out of your money. Some of these companies are even disguised as non-profit. With all of the scams out there, it’s important to know what to look out for.

First of all, any company that sounds too good to be true, probably is. Don’t be fooled by unrealistic claims. Credit repair takes time, and you won’t see results overnight. So you should steer clear of anyone who says otherwise. Also, a reputable service will repair your credit using legal and ethical practices, not by trying to remove accurate information. They should also be upfront with you about the fact that credit counseling is reported to the credit bureaus, and it’s not a particularly favorable mark.

A good credit counseling service should be accredited by either the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. It’s also a good idea to check out the company with the Better Business Bureau to see if they have any complaints against them. You can even call your creditors to see if they will work with a specific company, or if there are one’s they won’t work with.

Once you’ve found a company you think is reputable, ask plenty of questions. Find out what services they offer. They should really be focused on helping you repair your credit with proper support. They may offer extra services like educational programs for guidance. You will need to know about all of the fees involved, including any upfront fees and their commission. You also need to find out if they will assign you a specific counselor. You don’t want to be passed around every time you call. Make sure that you are comfortable with who you are going to be working with. You’ll have to deal with them for a long time.

After you’ve decided on a company and a plan, make sure to get monthly statements from them. The statements should include your plan details, the total amount you paid, the amounts sent to your creditors, and the dates the payments were made. You don’t want to be paying commission for work that isn’t being done. So make sure everything is getting paid like you agreed.

It may take some work to find a good credit counseling program, but you’ll be glad you took the time. Imagine how upset you would be to hand your money over to someone, thinking they were going to fix your problems, and they end up making them worse. So make sure to thoroughly check out each company you’re interested in. It can make a big difference in your results.