Borrowers may find it difficult to trust consumer counseling agencies, as they can seem too good to be true. Revealing personal, potentially embarrassing details to a stranger on the telephone or in person may feel wrong. Nevertheless, it's part of the debt management process and a necessary evil. The information you provide is totally confidential, and won't be shared with anyone but your creditors, who probably know it anyway.
What You Supply
When you call a consumer credit counseling agency, you'll need to provide basic information, such as your address, phone number, and Social Security number. You'll also need to tell the counselor your monthly income and expenses if you're receiving budget and credit counseling. Your monthly debts will be included in this information.
If you decide to participate in a debt management plan, you'll need to provide the counselor with your balance and minimum payment information; the counselor will use this information to negotiate a repayment plan for you that's within your means.
Confidentiality and You
Your counseling session as well as the information you provide to the agency is confidential. If you elect to enroll in a debt management plan, your creditors may decide to report the counseling information to the credit bureaus, but the agency itself will not report it. Since creditors usually elect to report debt management plan participation, any lender who reviews your credit history will most likely see that you're currently receiving or have received counseling in the past.
Pre-Screened Credit Offers
Lenders usually review credit profiles to determine possible eligibility for credit card or other loan programs. Based on debt management plan participation, you may find yourself receiving offers for secured credit cards. Be wary of accepting these offers, however: not only may you not qualify, as lenders haven't pulled your full report, you may find yourself kicked out of the debt management program. Getting kicked out has serious consequences. It may be impossible to re-enroll, and your accounts could be sent to collection.
Reputable Debt Management Sources
The National Foundation for Credit Counseling has an excellent reputation. It's America's oldest nonprofit. It's staffed with trained counselors who are certified in budget and credit management; counselors are also trained to offer housing counseling as well as bankruptcy counseling, should you need it. Its services are confidential, and it partners with local agencies so you can meet face-to-face if you wish.
There are other reputable debt management sources as well. Springboard Credit Counseling and Consumer Credit Counseling Services are nonprofits that are also highly rated by the Better Business Bureau and also promise to keep your personal information confidential.
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