Credit Counselor
Important Questions to
Ask When
Choosing a Credit
Counselor
If the organization you were working
with shuts down, you may be able to work a payment plan on your own
directly with your creditors.
But if you decide that you need additional credit advice and assistance,
or if you are considering working with a credit counselor for the first
time, asking questions like these can help you find the best credit
counselor for you. |
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What services
do you offer?
Look for a credit counseling organization that offers a range of
services, including budget counseling, savings and debt management
classes, and counselors who are trained and certified in consumer
credit, money and debt management, and budgeting. Counselors should
discuss your entire financial situation with you, and help you develop a
personalized plan to solve your money problems now and avoid others in
the future. |
An initial credit counseling
session typically lasts an hour, with an offer of follow-up sessions.
Avoid organizations that push a debt management plan as your only
option before they spend a significant amount of time analyzing your
financial situation.
DMPs are not for everyone. You should sign up for a DMP only after a
certified credit counselor has spent time thoroughly reviewing your
financial situation, and has offered you customized advice on managing
your money.
If you were on a DMP with an organization that closed down, ask any
credit counselor that you are considering what they can do to help you
retain the benefits of your DMP.
Are you licensed to offer your
services in my state?
Many states require that an organization register or obtain a license
before offering credit counseling, debt management plans, and similar
services. Do not hire an organization that has not fulfilled the
requirements for your state.
Do you offer free information?
Avoid organizations that charge for information about the nature of
their services.
Will I have a formal written agreement or contract with you?
Don’t commit to participate in a DMP over the telephone. Get all
verbal promises in writing. Read all documents carefully before you sign
them. If you are told you need to act immediately, consider finding
another organization.
What are the qualifications of your counselors? Are they accredited
or certified by an outside organization? If so, which one? If not, how
are they trained?
Try to use an organization whose counselors are trained by an
outside organization that is not affiliated with creditors.
Have other consumers been satisfied with the service that they
received?
Once you’ve identified credit counseling organizations that suit
your needs, check them out with your state Attorney General, local
consumer protection agency, and Better Business Bureau. These
organizations can tell you if consumers have filed complaints about
them. The absence of complaints doesn’t guarantee legitimacy, but
complaints from other consumers may alert you to problems.
What are your fees? Are there set-up and/or monthly fees?
Get a detailed price quote in writing, and specifically ask whether
all the fees are covered in the quote. If you’re concerned that you
cannot afford to pay your fees, ask if the organization waives or
reduces fees when providing counseling to consumers in your
circumstances. If an organization won’t help you because you can’t
afford to pay, look elsewhere for help.
How are your employees paid? Are the employees or the organization
paid more if I sign up for certain services, pay a fee, or make a
contribution to your organization?
Employees who are counseling you to purchase certain services may
receive a commission if you choose to sign up for those services. Many
credit counseling organizations receive additional compensation from
creditors if you enroll in a DMP. If the organization will not disclose
what compensation it receives from creditors, or how employees are
compensated, go elsewhere for help.
What do you do to keep personal information about your clients (for
example, name, address, phone number, and financial information)
confidential and secure?
Credit counseling organizations handle your most sensitive financial
information. The organization should have safeguards in place to protect
the privacy of this information and prevent misuse.
Only time,
a conscious effort, and a personal debt repayment plan will
improve your credit report and get
you out of debt.
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