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Credit Counseling Services - Knowledge is power
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When you are in deep trouble with debt and there seems to be no light at the end of the tunnel, it might be time to revert to a credit counseling expert. Infact, you might already be aware that credit counseling has been made mandatory before you consider filing for bankruptcy. It is important to select the right credit counseling company to work on your debt problems. Some might leave you with deeper problems for many years to come if you do not completely understand how the credit counseling company functions. Call them often and try to understand how the credit counselor will help reduce your debt.
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Credit Counseling Services - Knowledge is power
Using every service at your disposal only makes sense when dealing with your debt. This article gives some tips on information to consider when choosing a credit counseling service to help you as you progress to a deft free existance.
Follow the advice and ask the questions. It is better to spend the time upfront, to find the right service. You don't want to waste the time playing catch up after realizing you made a bad choice, because you didn't dig deep enough the first time.
If you are one of the millions of Americans who have tons of credit card debt you may be considering using a credit counseling service. In fact, if you're considering filing for bankruptcy, a new law will make it compulsory to work with one of these services. But the credit counseling industry is filled with sharks and there are a few things you need to know before you jump into the water with them.
First of all, recognize that many credit counseling services - even the "non-profit" ones - can actually leave you in deeper debt than when you started. They convince you to enter one of their "debt-management" programs and begin charging large fees (which are often hidden) that can end up making your total debt significantly larger. It's a huge scam that many people have fallen prey to. Make sure you aren't one of these people!
To protect yourself you must learn how to recognize the difference between a real credit counseling service and a scam. A good service will provide helpful debt advice, work with your creditors, lower your monthly payments, help you set a budget, and charge you a small monthly fee for their services (usually no more than $20 a month). They may also charge a small set-up fee that shouldn't be more than $50.
A "scam" credit counseling service can often be easily identified by their aggressive marketing and sales techniques. These are the companies you see advertised just about everywhere now: in magazines, newspapers, television, internet, and through spam email.
They offer quick fixes to your credit problems and promise to be your new best friend. Often, their ads will prominently display their non-profit status, hoping those words will instill a sense of trust in people. But, in reality, these companies seek the non-profit, tax-exempt status in order to evade state and federal consumer protection laws.
So what can you do to protect yourself from scammers? Take your time and do your research. Here are a few tips for finding a good credit counseling service:
If possible, work with a credit counselor in your area who you can sit down with on a regular basis, face-to-face.
Check with your local Chamber of Commerce and Better Business Bureau to see if there are any outstanding complaints against the counselor you are considering. If there are, you probably want to choose another service.
Find out if the agency offers free educational material. A "real" credit counselor will want you to be knowledgeable about how their services work. A bad counselor will want to keep you in the dark so they can get your money.
Ask about fees. If the setup fee and/or monthly fees seem too high, go somewhere else. Also, find out if they keep any percentage of the payments you send them. Scammers will often try to keep a large percentage of the first payment as part of their "voluntary" fees.
Ask how the counselors are compensated. If they work on commissions or get incentives for signing people up for debt consolidation programs walk away. Make sure that the agency is accredited and that your counselor is trained and certified.
Call your creditors (usually your credit card companies) and ask if they will work with the credit counseling service you're considering. If they won't the service can't do you much good.
Get all of the counselor's promises and terms in writing. Don't think that any verbal promises they make are binding.
Be sure that the agency you choose provides you with monthly reports that show who is receiving your payments and how much they have been paid.
By doing your research and asking the right questions you can protect yourself from credit counseling scams. A good counselor will help you solve your debt problems. A bad one will only make them worse. Take your time and choose well!
Jamie Clark is a writer and researcher for Credit-Counseling-Truth.com. For more usefulinformation and resources related to credit counseling visit www.credit-counseling-truth.com today!
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Credit Counseling Services Checklist
This article has some good tips to help you find and then choose a credit counseling service. The one you select should have most, if not all these elements in its favor.
You will be turning over the right to influence your financial future to these people. It is crucial you take the time to check them out.
By Joe Walsh
There are credit counseling agencies that rescue people from the deepest financial holes. There are also credit counselingagencies that just shovel in more dirt. How do you tell them apart?
Signs of a Reliable Credit Counseling Agency
Better Business Bureau Membership
The service's website should have a BBB logo and a link to their record on the Better Business Bureau website. Click through the link to check that there are no unresolved complaints against them. Many people only think about the Better Business Bureau after they've been cheated, but by then there's not much you can do. Working with a credit counseling agency that is a member of the Better Business Bureau means that you can go to them to help mediate any dispute you might have with the service provider.
Accreditation
Reputable credit counseling services will be accredited by an independent nonprofit, just as many schools are. One such accreditation body is the National Institute for FinancialCounseling Education.
Fees
A good credit counseling agency will charge a small, reasonable monthly fee, usually around $30. Some also charge a fee upfront, though this fee should be reasonable (around $50 tops). It may be possible to get a hardship waiver of these fees if you truly do not have the $30-50.
Clear Application
The application must clearly say what the fees to be paid are, what the services to be provided are, and in what timeframe all of this will be provided.
Reasonable Promises
Run far, far away from any organization that proposes to "wipe out" your debt for you, rather than simply helping you to repay the debt. Short of your creditors just deciding to forget about the debt (unlikely), there is no way to erase debt even bankruptcy leaves a huge mark on your credit report for ten years.
True, your car may not go missing from your driveway if you stop paying unsecured debt (i.e., debt that is not "secured" with collateral, like most credit cards, unlike most auto loans). But you are still legally obligated to pay the debt, and the possibility of being taken to court will loom over you. You will likely be unable to get even "bad credit" financing if you still have debts in collections good luck buying a car or house.
Not Necessarily Signs of a Reliable Agency
Nonprofit Status
Nonprofit status is essentially a tax designation, not a government endorsement of a group's mission. There are plenty of near-fraudulent credit counseling agencies that are registered nonprofits.
Respectable Name
Any group can put words like "National," "Alliance," "Assistance," and other trust-inspiring words in their name. But a name is just a name. Make sure to check any organization against the list above to make sure they're reliable. Also try searching for the group's name on a search engine. Don't just look for a lack of negative reports that might just mean the group changed names recently. Instead, look for positivereviews from real people, and preferably mention on reputable third-party websites, such as news sites.
Ready to find a credit counseling agency? You're in the right place: the web is full of credit counseling agencies. Just use the checklist above, and you'll have no trouble separating the saints from the scams.Once you have compared the credit counseling agencies to the yardstick provided in this article you can then make an informed decision.
If, after you read through these article you would like a suggestion of a good credit counseling agency try Care One Credit.
Look around their site. Read the articles and other information you will find there. Then if it makes sense, you can give them your info, for a quick evaluation.
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