Credit Counselor

What to Look For In A Credit Counselor

Selecting the right credit counselor can make a huge difference in your debt consolidation experience. If you choose to go with a credit counseling service rather than consolidate on your own, you need to be aware of the possible problems. Many organizations exist that rather than looking out for your best interests, will be trying to make a profit.

In choosing a credit counselor, it may be best to select a credit counseling company which belongs to a nationally accredited organization, such as the National Foundation for Credit Counseling (NFCC). This will ensure that the agency must meet certain standards for quality.

When choosing a company, be sure that:
•    The entirety of the money you pay to go towards your creditors is actually going towards your creditors – some companies take a $15-20 “donation” or 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, not to mention could be unexpected for those who haven’t done their research. Successfully paying off all of your debt requires on time payments every month – if your debt management program holds on to all or part of payments, then your credit score is going to be damaged and your debt is going to take longer to pay off.
•    You research the company – ask the company for referrals from people who’ve used them, as well as asking around on message boards and checking with the Better Business Bureau in their area.
•    The company offers a full range of services. Not everyone needs a debt management plan. Sometimes, all you need is someone to help you sort out all of your creditors and make a plan. This is why a counseling service with a full range of plans may be best for you, and a full counseling session of at least an hour at the beginning is necessary. You need to be sure that this company is actually looking out for you, and doesn’t just want to catch you in a program that you cannot get out of.
•    The company will work with any creditors that are willing to work with it. Some creditors will not work with credit counseling services or debt consolidation companies, preferring to deal directly with you. But your credit counseling company should be willing to work with all companies. Some debt consolidation companies will not work with certain creditors, preferring only to work with creditors from whom they receive some form of profit.
•    The agency is bonded or insured, so you are protected against the agency closing down.

When choosing a credit counseling service, an important thing to beware of is companies making magical promises. It’s the old saying “If it sounds too good to be true…” No company can magically increase your credit score or make things on your credit report disappear. Fixing your credit score and paying off debt is something that takes time, planning, and persistence. It can’t be done overnight.