What is consumer credit counseling services?
Many of us at one time or another have made bad money decisions. The trick is not to made too many of them and that we learn from our mistakes. I find it disturbing that in a society where money and debt are major parts of our everyday lives, that many of us are ignorant of some basic principles. You would think that more time and effort would have been spent on teaching about money management while we are in grade school and high school. Most of us only get some basic instruction.
For those who have crossed the point of no return, some form of consumer credit counseling services may be in order. There are various companies, such as the ones offered at the main page of this website, that can help you develop an effective debt management plan. Consumer credit counselors will give you advise on managing your money, offer solutions to alleviate your current financial dilemma, and can help you develop a plan that will help steer you away from bad financial decision making in the future.
Finding the Right Consumer Credit Counseling Service
No matter what your particular financial need is choosing the right credit counselor is essential. The United States Senate discovered that some of the newer companies coming into the field have a ‘for profit’ business model, so that their non-profit credit counseling organizations generate huge revenues for affiliates. The same report applauded the National Foundation for Credit Counseling (NFCC) for their low cost credit counseling services.
It would be prudent for the consumer to shop around the different agencies with a preselected set of questions. When speaking with one of their counselors or agents ask the following:
1. Are they affiliated with a national organization such as the NFCC which have high ethical standards?
2. Do they have third party accreditation? You do not want get involved with agencies that are self accrediting. The Council on Accreditation (COA) is a reputable third party accreditation body which the appropriate checks and balances designed to protect the consumer.
3. Is it registered as a 501(c)(3) non-profit? While this is not an absolute guarantee that the firm is legitimate, it’s a good sign.
4. Are the Board Members compensated by the agency or have family ties to it’s members. They should answer no to this.
5. Exactly what services do they provide? A good sign is if they offer a wide range of services such as debt management, credit counseling for those who are not in debt as well as those who are, counseling for first time home buyers, reverse mortgage and foreclosure prevention to name a few.
6. What are the fees? Find out what are the costs involved with their services. Do not pay up front. Find out if there are any set up fees, or monthly service fees. Set-up fees should be around $50-$75 and monthly fees should be about $25.
7. Is your personal credit counselor accredited by the NFCC?
8. Will the agency work with all your creditors? There are some firms which will not work with any creditors who will not pay them directly.
9. How long will your credit counseling last? Short credit counseling sessions are inadequate to access your financial position. Your initial session should take at minimum one hour.
These are some of the more important questions that you need answered so that you can make a informed decision about which agency is the right one for you. Do not rush into a decision. It took you some time to get into your financial position. So take a little time to find the right one.