Do you think you need to go to a credit counselor? The first step before you decide is to run a budget or plan to help you get out of debt on your own. If you can’t see any easy solution, a credit counselor can help – just be sure to go to the right one!
Unfortunately there are more than a 1000 different credit counseling services in the United States, and not all of them are actually helpful. These kinds of services are geared just toward unsecured debt, like credit lines and credit cards. If your main problem is car loans or mortgages, a credit counselor is not the best choice.
The best kind of credit counseling service will provide you with a good debt management plan plus some education. The counseling service will often contact your creditors on your behalf to see if they will agree to the plan. You could try this yourself first, as often you can save yourself money this way. If you don’t have any luck, a credit counselor might have better luck than you as long as he is from a reputable organization that creditors are familiar with.
With a credit counseling service, you are typically sending the money to them and they pay your debts. Due to this, you need to be extremely careful when selecting one. Unfortunately there are a lot of shady services and scams in this business.
To find a good company, I always suggest asking friends and family first. They are always the best referral. If you have no luck there, the next step is to do a little research on your own. The first stop should be the Consumer Federation of American at www.cfa.org. They offer some sound advice on selecting a service.
Once you find a company, always check them out with the Better Business Bureau. Discuss fees upfront and ensure they are not too high and that counselors are NOT paid on commission. Many good services provide no or low fee options. Check to see if they are a member of the National Foundation for Credit Counseling and provide you with an in depth privacy policy. In addition, meet with them in person and trust your instincts.
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*Avoid Credit Counseling Scams
*Credit Counseling Agencies-Protecting Yourself From The Bad Apples
*A Look at the New Bankruptcy Laws