Questions You Should Be Asking About Consumer Credit Counseling
Choosing to manage your debt by enlisting the help of a credit counselor is the first step to personal financial freedom for you. However, it is imperative that you choose wisely when it comes to a consumer credit counselor because you are essentially putting your financial future into the hands of this person who will help you to overcome your problem with debt to live a life of financial freedom.
A credit counselor will look at your credit card debt, medical debt, IRS tax debt – any debts you have, your income and your personal expenses and help you to find the best possible solution to your debt, even if that means enrolling in a debt management program. Your credit counselor will also help you to lower your interest rates and even your monthly payments by contacting your credit card companies. This is a person who is on your side financially, which means you need to choose someone you are comfortable working with and confident will help guide you to financial freedom.
Is This a Non-Profit Company?
The first question you should ask when you choose a credit counselor is whether or not the company he works for is a true nonprofit, which means that it does not receive money for helping you. Some companies that are not nonprofit credit card debt solution companies will charge you additional monthly fees and use you as a way of earning money. To know if a company is a true nonprofit, you need to find out if it is listed by the IRS as a 501(c)(3) commonly referred to as a charitable organization.
What is Credit Counseling Company’s Accreditation?
Before you trust anyone with your personal finances, it is important to ensure they are properly accredited by a national, and well-known company such as the Better Business Bureau or the National Foundation for Credit Counseling, the NFCC. This can be done by asking the company to see its accreditation or by checking online to see who has accredited the company.
Are You A Trained and Certified Debt Counselor?
This is a question you must ask your credit counselor before you entrust him with your financial future. Or even your personal information. A credit counselor that is trained and/or certified by the company for whom he or she works is simply not good enough. You need to check for outside training and certification by your credit counselor. You also need to ask if your counselor has a financial background, such as accounting, law or even financial planning. These are the type of counselors who are experts in their field. This will inspire confidence in their ability to help you become debt free.
What is the Cost of your Credit Counseling Services?
Never enter into a financial agreement with a credit counselor without first asking what the personal cost to you will be. The bottom line should be either free or a very low-cost one time fee. For example, a credit counselor should not charge you for a meeting. Or the fee should be no more than $100 per hour. When a credit counselor tells you that the fee varies, walk away and find a new one. They should not give you different quotes, fees, and percentages that go along with your total debt.
What Debt Relief Services are Provided to Me?
Many companies provide both credit counseling and debt management. Credit counseling is the first step. This is a way for you to learn how to manage your debt and live within your means. At least, do so without accumulating more debt. The Federal Trade Commission shares that counselors give you pieces of advice in managing your funds and help you create a budget. A debt management company or plan is going to help you with your debt. This happens by attempting to negotiate with your creditors. Financial advisors suggest using this as a last resort because it could negatively impact your credit even more. A financial solution that is best for everyone is credit counseling. If that doesn’t work, a debt management plan is always the second choice.
How do You Provide Your Services?
Most credit counselors are available to help you by phone, online or in person. But you should be cautious of those who promise you can handle everything by email. Or even those who say they can have your debts paid off in no time. At least, if they say this can be done for very little and can improve your credit rating. These companies are more than likely a scam or fraud debt relief company. Credit counseling is not a miracle. It is an assistance program that teaches you to manage your debt. It also teaches you to work within your budget and eliminate your debt through hard work and dedication.
Credit counseling is a good first step for anyone who needs to manage their debt. A credit counseling company should educate you about debt and how to live without it. This should be something they are willing to work closely with you regarding. It is imperative to remember that a debt counseling service is not a miracle plan that will eliminate your debt for you in no time.