Renowned and reliable consumer credit counseling agencies help people to manage their debts through free financial analysis and budget counseling. They offer free credit counseling and arrange an affordable repayment plan for the debtors.
Check out the following sections which have been highlighted in the article:
3 Situations when consumers opt for credit counseling
Usually consumers get the credit counseling services under the following circumstances:
When they'e lagging behind their debt payments
When they're going to file bankruptcy (also known as bankruptcy credit counseling)
When they're facing mortgage debt related problems
How to choose a good credit counseling agency
Check out the following tips to select a reputable credit counseling agency:
Evaluate their services: A credit counselor is supposed to help you in budget planning. He should suggest you a comprehensive action plan for paying off your debts. Find out a consumer credit counseling agency which will offer free counseling sessions to you. If the credit counselor doesn't bother to check your financial reports, and claims that only a debt management plan will solve your problem, then he is not speaking the truth.
Look at their accreditation: This tip will help you differentiate between good credit counseling and a bad one.
Find out if a credit counseling agency has been accredited by the following organizations:
International Standards Organization (commonly known as ISO)
National Foundation for Credit Counseling (NFCC)
Council on Accreditation (COA).
Association of Independent Consumer Credit Counseling Agencies (AICCCA)
You can visit the official websites of the above organizations to know about the accredited credit counseling companies in your state. Make sure you check the date of accreditation.
Watch out for the unresolved complaints: Once youâ€™ve shortlisted credit counseling agencies in your state, you should look for the unresolved complaints against them. You can get information about this from your State Attorney General. You can also visit the official website of Better Business Bureau (BBB) to know about the registered complaints against the agency. It is best to get the consumer credit counseling service from an agency which has less number of complaints against it.
The old credit counseling agencies (which have been working with the consumers for several years) are likely to have complaints against them. Some or the other consumer may not be satisfied with the services offered by the counselors. Check whether or not the credit counseling agency has a short or long list of unresolved complaints against it. Avoid working with a newly established agency which has a long list of complaints against it.
Know about the fee structure: Get the fee structure in writing. There is a valid reason for doing this. The credit counseling may claim that you have to pay $30 as monthly fee. However, it can charge a higher a fee later on. This will create misunderstanding and problems. Never agree to work with a credit counseling agency which charges excessively high fee. Your main goal will be to work with an agency which offers cheap credit counseling service to the consumers.
Seek advice from your relatives: Debt is a worldwide problem. So, there is a great possibility that one of your friends or relatives has encountered a debt problem. There must be someone who has enrolled into the credit counseling program to discard his debts. This person can be your friend, family member or a relative. Request him/her to suggest a good credit counseling agency to you. Your friends or relatives can offer a wealth of information about the NFCC or AICCA approved credit counseling agencies.
Dig out detailed information: You need to make a detailed research on the credit counseling agency. Find out if the agency has experienced and certified credit counselors. It is better to work with those counselors who have been certified by authorized agencies.
You next task will be to find out how the employees are financially compensated. There are some credit counseling agencies which offer lucrative incentives to the counselors after they have persuaded consumers to enroll into a debt management program.
Sometimes, consumers run to the non-profit credit counseling agencies to save the debt reduction cost. They want to get free credit counseling services. If you do want to work with a non-profit credit counseling agency, make sure you do some homework. Check its non-profit status to be sure that youâ€™re not working with a legitimate credit counseling agency. Find out if the non-profit credit counseling agency really charges a nominal fee.
How do I select a good credit counseling agency?...
By signing up a debt counseling session, your provided details (Name, Email ID and Phone No.) will be forwarded to the company advertising on the DebtCC. However, you have no obligation to use their services.
Some creditors and collection agencies refuse to lower the payoff amount, interest rate, and fees owed by the consumer.
Creditors/collection agencies can make collection calls and file lawsuits against the consumers represented by the debt relief companies.
Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.