How To Shop For A Legitimate Non-Profit Credit Counseling Service

Before seeking a credit counseling service, of course, first try to fix your credit yourself if your credit needs ‘fixing’ so-to-speak, that is by far a better route to go.
You can start by calling the creditor(s) you owe– yourself: banks, credit card companies, department stores—to see if they have an in-house program to help you put into place a debt-reduction program with more affordable monthly payments.
Even if they don’t have an in-house program, you can still ask to speak to a person in charge who can discuss this with you so that you know what options are available to you. However, if after you still feel you need some professional help, then read on.
Legitimate non-profit consumer credit-counseling services can provide much-needed help for consumers in the form of education first and second with forming a plan for you to repay debt.  A reputable agency focuses on providing you with information and classes not only on collecting information about your debts and informing you as to how much to repay monthly.

But, you must be very careful, you must do due-diligence to make sure it is a correct step for your situation, and if you decide it is then you must make sure it is indeed legitimate, and a true “non-profit.”

Either way, make sure that what they recommend as a program for you will help your credit score not harm it in the long run.

Ask lots of questions.  That may seem obvious, but many people do not ask any questions as to the entire program and its ramifications.  It is hard when you are worried, but you must be practical and not emotional, so that you can maintain clarity and know what you are agreeing to. Ask how their counseling services may impact your credit scores. Get the facts. All information should be disclosed to you upfront.

Please know the subject of this article is not for-profit debt elimination, debt-management or for-profit debt-reduction programs, services, or companies; instead the subject of this article is “legitimate true non-profit credit counseling services.

To qualify for non-profit status, agencies are supposed to offer education and counseling services. Though know that an agency being “non-profit” does not guarantee legitimacy, you must still do thorough due-diligence so that you get the help that you need.

After a program has been recommended to you, then take time to think it over before making any commitments; do not sign documents there at the office.   Also, before signing with an agency, make sure your creditors are willing to work with that organization.

Take all documents home with you and take time to review all paperwork given to you so you don’t make a hasty decision, and have time to process what you have been told. Do not let anyone persuade you into making a decision then and there.

Here are some more secrets to what you should look for when selecting a reputable consumer non-profit credit counseling service:

*Check the company through the “Better Business Bureau” http://search.bbb.org/ where you can find information about the company’s business practices, and of there has been any consumer complaints about the company.

*See if the credit counseling agency is “government approved”, you can do so at the “Department of Justice” http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm In order to become government approved, credit counseling agencies have to be non-profit, bonded and in compliance with applicable laws. The company must also provide detailed information about their experience, counselor training, fees and more.

*The agency should also be a “certified consumer credit counseling service.” See if the agency belongs to the “National Foundation for Credit Counseling” http://www.nfcc.org or the “Association of Independent Consumer Credit Counseling Agencies” http://www.aiccca.org. Members of the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies are all accredited agencies with certified counselors.  And members of both groups are required to limit the amount of fees they can charge and follow specific standards.

*The “Federal Trade Commission” website http://www.ftc.gov/ can also provide you with information on choosing a legitimate non-profit credit counselor.

*Check with your State Attorney General’s Office—Find out if the company have any pending legal investigations against them?

* The counselor should create a plan tailored to fit your personal circumstances—they should not just give you generic advice. And often an experienced counselor will spend close to an hour reviewing your financial situation, prior to making recommendations, and will then offer follow-up sessions on a regular basis.

* The consumer credit counseling service should offer formal written contracts and provide free information about the consumer credit counseling services to be performed and describing any, and all fees due and payable by you, payment terms and total cost; how long it will take to achieve results; any guarantees, the counselor’s name, business name, address and all contact information.

* Beware of agencies that ask for your first monthly payment to cover their fees, high monthly service charges, or “voluntary” contributions.  Any more money paid by you will reduce the amount of your money available to pay off your debt.

*Once you do sign-up with a company, review your consumer credit counseling service report of your payment plan regularly to ensure your payments are going to pay the creditors to reduce your debt–check with your creditors to make sure the counseling agency is paying your bills on time, or you will get penalties and late fees. You must always protect yourself and manage your money.

*Ask about further education: What kinds of fees are charged for any additional counseling services? Ask if a free budgeting session is available?

Copyright © 2009 by Mara Rogers of Secrets for Money http://www.SecretsForMoney.info

Photo Credit: Photograph “Coins” by Joe Shlabotnik to see more of this Photographers work: http://flickr.com/photos/joeshlabotnik/ and http://flickr.com/photos/joeshlabotnik/2143212474/

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