Credit counseling agencies are companies that offer you advice on how to manage your money and debts more efficiently. They help you to organize your budget in a way that will fit your way of life and monthly payments. Credit counselors receive proper training and certification in these areas. They also help you develop a personalized plan to get out of debt. Credit counseling is a requirement for those who intend to file for bankruptcy.
Services
One of the first questions you should ask a credit counseling agency is which services they offer. Look for a company with a variety of services, such as budget counseling, savings and debt management classes, bankruptcy filing and help to find alternatives to bankruptcy. Avoid any company that does not spend a considerable amount of time looking at your financial situation before offering their services. A reputable organization will offer a personalized evaluation of your situation.
Fees
Ask about fees, including total costs, monthly payment options and mandatory up-front fees. Get specific quotes for all of the services they provide and compare agencies to see which one offers the most value. Decide whether or not you have the income necessary to pay these fees. Up-front fees are often around $250. If you are having money problems -- which you probably are if you are filing for bankruptcy -- this can often be a burden, and you may decide to address your credit issues on your own.
License
Credit counseling agencies are required to have state licenses to offer services in that state. Ask the company if they have all of the necessary licenses. Ask if their counselors are licensed to offer you the financial help and advisement you need. A reputable company will only have licensed staff advising you. If a company is licensed, you then know that it is following all of the necessary regulations.
Privacy
You have the right to demand the protection of your information. A credit counseling agency does not have the right to sell or share your information with third parties without your permission. Ask them how they will protect your information and how you will be assured of this. Ask if there is a confidentiality contract between you and the agency. Information that you have the right to protect includes your name, address, phone numbers and any records of your financial situation.
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