Reliable Credit Counseling

Credit counseling firms run the full spectrum, from reliable to unscrupulous. Some advertise that they are not-for-profit to make them seem credible, but the Federal Trade Commission (FTC) website warns that this status does not guarantee legitimacy. Reliable credit counseling has certain characteristics relating to services, fees and counselor qualifications.

Training/Certification

Reliable credit counselors should have formal training, preferably from an outside organization, according to the FTC. Legitimate counseling firms require their counselors to get training and certification from a professional organization. The firms themselves obtain licenses when required by the states in which they operate. Always ask about training and licensing before working with a particular counselor. The Better Business Bureau (BBB) advises that reliable firms are members of the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling.

Services

Legitimate credit counseling firms do not limit their services to debt management plans or bankruptcy advice. Reliable credit counselors work with people who have extremely challenging financial situations, but they can also help you if your problems are minor, according to the BBB. For example, if you are just starting to miss payments on your bills, your counselor can help you develop a budget and make suggestions such as getting your due dates moved to coincide more closely with your employer's payroll date. The counseling firm may also have financial management seminars to help you build your skills. You can always consider a formal payment plan or bankruptcy if your situation is too advanced for those options.

Methods

Reliable credit counseling offers several different options. Counseling firms usually have offices, so you can speak with someone in person. Many also let you work with a counselor over the telephone or Internet through online chat or email, according to the FTC. These alternative methods give you access even if you cannot get to an office due to distance or your work schedule. You should receive the same quality of service, no matter which method you choose, as long as you provide accurate information to the counselor.

Fees

Even nonprofit credit counseling firms usually charge fees for certain services. A reliable counselor tells you up front which services require payment, and the firm should be willing to put those costs into writing before you agree to anything. Good counseling companies have an array of free offerings, such as online educational materials. Charges should be limited to extensive help, such as setting up and administering a debt management plan.