Where Are The Best Credit Counseling Services?
Locating the best credit counseling services is great start toward getting financial problems under control. In recent years, the tough economy has diminished many savings and retirement accounts. As the economic outlook slowly improves, finding the right financial guidance and counsel will help reverse the damage.
Here are some sources to look for the best credit counseling services:
- Friends and Family- speak with friends and family to determine if they know of reliable, trustworthy counselors in your area.
- Industry Groups- consult with the National Federation of Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies to see if they can recommend someone in your town.
- Universities- many universities have special relationships with reputable credit counselors.
- Military Bases- military families have tremendous stress. Adding financial difficulties on top can be a severe burden. The military can point families to local counseling agencies.
- Credit Unions- with growing distrust in large banks, credit unions are more popular than ever. Among the wide variety of services they offer members, many can recommend credit counseling services.
- Housing Authorities- many housing agencies offer credit counseling services as part of their services to homeowners having difficulty completing mortgage payments on time.
- Online- some consumers will turn to the speed and convenience of the Internet to locate credit services. The same caveats apply to any credit counselor whether they are located through other people or online. Check references and do not be reluctant to walk away if things do not feel right.
The Right Credit Counseling Match
Whether a credit counseling service is located through friends or a formal organization, it is important to be comfortable with the individual counselor. Take the time to investigate two or more services and determine which staff provides the type of help needed.
Preliminary appointments should last anywhere from an hour to 90 minutes. After the initial meeting, there is usually a series of telephone calls and secondary meetings depending on the individual situation.
Probe for Credit Counseling Solutions
Before a formal meeting, it can be productive to prepare a list of questions to ask the prospective service. Find out if their counselors are on any kind of commission plan or incentive program. If a formal debt management is suggested, find out:
- How long will the plan be?
- How much lower will the overall debt be at the end of the plan?
- What are the monthly payments?
- Does the service communicate with creditors directly?
By writing down these questions beforehand, consumers can make sure the discussion focuses on their needs.
If they give evasive or give incomplete answers, simply find another service.
Credit Counseling Fees and Payments
Should a consumer opt to enter in to a debt management program, there should be NO UPFRONT FEES as is mandated by the Federal Trade Commission. As a client, you will be making a monthly payment into an FDIC insured “Special Purpose Account”. You will use this account to accumulate the funds that will eventually be used to pay off the creditors; usually at a reduced rate. As the money in the account builds, professional Debt Negotiators will use the money as leverage to negotiate and settle each debt one by one. Settlements typically range from 30% to 70% of the outstanding balance. Other fees for management and maintenance are spread out over the length of the program.
Avoid any agency or organization that asks for upfront fees. They are illegal and indicate the service is likely not legitimate.
Credit Counseling Contracts and Provisions
Basic credit counseling often does not involve contracts however Debt Consolidation is a program and a professional financial counselor will require a formal agreement. Debt management plans need signed contracts and will spell out the basic criteria- the monthly payment amount and the length of the program and plan.
Finding the best credit counseling services doesn’t need to be stressful. Take the time to research and investigate several organizations to find the right fit. The right credit counselor helps consumers find financial stability and peace of mind.