How to Choose Debt Counseling

For consumers who have a hard time paying their bills, a credit counseling service can offer guidance and solutions. This type of service often offers money management courses, budget counseling and debt relief. While most credit counseling services are reliable, there are some that overcharge and do not offer the type of services they should. If you find a reliable debt counselor, he will not only teach you about personal finances, but will also help consolidate all your debt into an affordable monthly payment if that is the best solution for your debt issue.

Instructions

1

Shop around for a credit counselor and ask what the services involve and what the prices are from the very start. Just as with other products and services, you want to compare services and prices. When you compare different debt counseling services, you will find a service that does not charge you several hundred dollars a month. Avoid companies that charge large fees and promise to return part or all of the fee when the program is finished.

2

Select three or four debt counseling companies you might be interested in working with. Contact them either online or by phone. Ask direct questions about fees and services. Look for straightforward answers and a willingness to disclose every service and charge from the very beginning. Ask about other services besides debt consolidation. Many reliable debt counseling services offer other services, like a free budgeting session or other personal finance workshops and information.

3

Check for accreditation from third party associations like the National Foundation for Credit Counseling or Association of Independent Consumer Credit Counseling Agencies. Check for counselor certifications and training.

4

Listen to what the counselors have to say over the phone or online. Pay attention to the time they are willing to spend with you and the information they offer. Avoid debt counselors that immediately suggest a debt management plan without getting all the facts.

5

Treat nonprofit debt counseling services cautiously. Find out how the agency is funded and ask about prices. Just because an debt counseling service is registered as nonprofit does not mean their fees are reasonable; some charge higher fees than a for-profit credit counseling agency.

6

Check the reputation and reliability of the companies you may be interested in working with. Call the Better Business Bureau and see if there are any complaints against any of the companies you are considering.

7

Choose the debt counseling service that offers the services that best fit with your needs and where you think you will learn the most.