6 tips for finding credit counseling

February 24, 2012
By Karen Lawson

Although they exist to help you, credit counseling services, debt settlement companies and bankruptcy lawyers compete for your business. In general, seeking the assistance of a certified credit counseling organization is a good place to start if you’re in trouble with credit card debt. Credit counseling services typically review your finances, your credit card debt and available income for determining how to address your debt situation. These tips can assist with finding local and online credit counseling and debt consolidation programs:

1. The Federal Trade Commission warns against paying fees or costs in advance. Wait until you determine how or if credit counseling can help you, and sign an agreement for services with an itemized schedule of charges and their due dates.
2. Ask about how and where credit counselors receive training. Agencies such as the National Foundation for Credit Counselors (NFCC) certify credit counseling agencies meeting their criteria.
3. Ask credit counseling agencies if they are licensed, and if so, by which organizations. Avoid doing business with unlicensed credit counseling agencies.
4. Although discussing finances can be difficult, asking friends or family members for referrals can be helpful.
5. Avoid unsolicited offers of debt help, and services promising to “repair bad credit.” Reducing your debts and paying them off according to account terms or the terms of a debt management program established by a credit counseling service is a straightforward way of improving bad credit.
6. Considering multiple credit counseling services assists with finding a “good fit” for your situation. Being comfortable with debt management professionals promotes honesty and trust. Preparing all requested information prior to meeting with credit counselors helps counselors match your needs to an appropriate debt management program.

    Discussing financial problems with your credit counselor may seem embarrassing or humiliating, but being truthful is important. Withholding information about what and who you owe can cause your debt management plan to be rejected or cancelled, and even if it isn’t, it’s still likely to derail your debt-reduction efforts.

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