How to Rate Credit Counselors

A reputable credit counselor can be invaluable in helping those who are struggling with their bills to become debt-free and more in control of their finances. The financial experts at Credit.com urge you not to rely on the results you see in your search engine when looking for a credit counselor--many of these agencies may be unscrupulous and care more about getting fees from you than solving your debt problems. Knowing just where to go and what questions to ask when you call for information can help you rate credit counselors before you agree to accept the agency's services.

Instructions

Finding Legitimate Credit Counselors

1

Select among one of the nonprofit credit counselors affiliated with the National Foundation for Credit Counseling. The NFCC provides services in more than 1,300 locations to around 2 million people annually, notes Credit.com. A member agency of the NFCC will also be accredited by a third-party entity, such as the Council on Accreditation, which ensures that there is adequate oversight of the credit counselor that in turn protects your interests. You can find a member agency of the NFCC by calling (800) 388-2227 or accessing its website, nfcc.org.

2

Ask the credit counseling service about its fee structure. The NFCC notes that there will likely be a one-time set-up fee of $50 or less and monthly service fees of $25. The set-up fee should not be pocketed by the credit counselor, but applied toward your debt. Be wary of credit counselors that operate on a "voluntary" fee basis or that pocket your set-up fee. The NFCC notes that if you cannot afford these fees, a reputable credit counseling service should offer to waive them. The NFCC notes that you may also want to request that the service provide you written proof that it is bonded or insured to protect you from fraud or the counseling service's own financial difficulties.

3

Inquire about the range of services and solutions that the credit counselor offers. The NFCC notes that in many cases, a debt management plan (DMP), in which consumers pay the credit counseling agency a set amount each month that is used to pay down their debt, may often be appropriate. But it shouldn't be the only solution to debt the agency offers. A reputable credit counselor should offer a variety of options, each appropriate to the consumer's specific financial situation.

4

Make sure the credit counselor will work with all of your creditors and not pick and choose, urges the NFCC. A reputable credit counselor will take a comprehensive approach to the consumer's total debt and find a way to address it in its entirety, rather than work only with creditors who are amenable. A top-rate credit counselor won't promise to clean up your credit, notes the NFCC, as this is impossible, if the negative information in your credit file is accurate. However, working with a credit counselor can help you slowly rebuild your credit over a period of time.

5

Ask how long your initial session will last. The NFCC states that most initial sessions with a credit counselor take at least 30 minutes, as any less time will result in a less-than-thorough assessment of your financial situation. The Federal Trade Commission also urges you to find a counselor who meets with you face-to-face rather than over the phone or online.

6

As a last measure, take the names of the credit counselors that meet the above criteria and find out what other consumers have said about them. If there are complaints lodged against the agency, they will be on file with your local Better Business Bureau or the attorney general's office in your state. The NFCC notes that it's important to find out how the credit counselor resolved the complaints before you decide to seek services.