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Nonprofit Credit Counseling Agency

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To avoid being ripped off, exercise caution and do your research. In this article, we present the questions that you should ask a credit counseling agency before hiring their service.

As a customer, don't be afraid to inquire about these issues. An ideal counseling agency would not hesitate to give you clear and straight answers. Consider the following questions:

* What are the credentials of the agency? Is it a licensed agency and one that is accredited by the government? Is it a member of a national credit organization?

* Where does the agency derive most of its income? Are the counselors paid based on the number of clients they enroll in the agency's debt consolidation program? If the agency's income is dependent on client's fees, chances are you may be charged expensively for its services.

* Are the counselors certified and competent to give correct advice? See to it that all employees of the credit counseling agency are licensed and professional. What kind of training did they have? Do they have experience in handling different types of debt issues?

* How long does each counseling session last? A good agency should provide each client at least 90 minutes of counseling. During each session, the client's problem should be thoroughly discussed to make sure that an appropriate solution can be taken.

* Will my confidentiality be assured? Since you will be providing a lot of personal information about your finances to your counselor, the agency must guarantee the confidentiality and safety of your privacy.

* What costs are involved and how much does the agency charge for its services? All the costs involved should be discussed right from the beginning. As a client, you should be clearly aware of all the fees you'll be paying in exchange for the company's services. Nevertheless, bear in mind that you should not submit any payment until the services has been rendered. A legitimate credit counseling agency should not demand payment from you until your problem has been resolved.

* Can you access your account regularly? You should have the option to access your own account particularly if you're going to sign up for the agency's debt consolidation program. This way, you can be assured that all your payments are properly submitted to your creditors.

* What exact services does the counseling agency provide? Watch out for agencies that insist on debt consolidation without first exploring other possible solutions to your debt problem. For instance, a counseling agency should not only help you get out of debt but should teach you how to manage your finances more effectively as well. Your counselor should help you work on a budget to make sure that you won't have debt problems again.

Copyright ? 2008 Consolidate4Free.com

Nonprofit Credit Counseling Agency

Are you barely making ends meet? Dodging debt collection calls? Unable to meet your monthly expenses much less save money for emergencies or retirement? If this sounds familiar, you may want to consider credit counseling. Credit Counseling can improve many aspects of your life. It can help you get out of debt faster and improve your credit, just to name a few. And there are many agencies out there that would love to quickly enroll you in their Debt Management Program. However, not all agencies are created equal and not all agencies are truly looking out for your best interest. As with most things in life, if it sounds too good to be true, it probably is.

This article will outline some guidelines in choosing a credit counseling agency, what questions you should ask and a few warning signs that you may not be dealing with an ethical practice.

Choosing a Credit Counseling Agency

Reputable credit counseling agencies advise you on how to realistically manage your money and your debts, help you develop a workable budget, and usually offer free educational materials and workshops.

Develop your own list on the potential credit counseling agencies and the best way to check the reputability of those short listed credit counseling agencies is to check them with the Better Business Bureau at www. bbb.org. From they you will know how many complaints have been filed against these credit counseling agencies and for what reasons.

Credit counselors should be certified and trained in the areas of consumer credit, money and debt management, and budgeting, and should discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems without pushing a debt management program. Erase them from your list for those credit counseling agencies that keep pushing you to enroll into their debt management program without understanding first on your financial condition.

The Cost

Although many credit counseling agencies are nonprofit, there might be some fee involve. Bottom line is whether they request "fees" or "contributions", they should be disclosed and should be reasonable. Anything over $50 for a consultation fee or monthly fee or contribution is NOT reasonable.

Make sure that the agency is not keeping the first months payment as their fee! This is known as a bad practice in the industry and has been the source of state attorney general lawsuits as well as many individual actions against the agencies that do this.

What Questions To Ask? What services do you offer?

Look for a credit counseling agency that offers a variety of related services. Avoid agencies that push a debt management plan (DMP) as your only option before they spend a significant amount of time analyzing your financial situation.

What educational materials/information do you offer? Is it free?

Avoid credit counseling agencies that charge for educational materials or other written information.

What are your fees? Are there set-up and/or monthly fees, how are they broken down?

Get a specific price quote in writing and make sure you understand exactly what fees youll be charged.

What if I cant afford to pay your fees or make contributions?

Under the terms of the Pension Protection Act of 2006, non-profit credit counseling agencies must provide services for free if a consumer is unable to pay.

What are the qualifications of your counselors? Are they accredited or certified by an outside organization?

Use an organization whose counselors are trained by a non-affiliated party and who have a background in debt management, consumer credit and budgeting/finance.

Once you satisfied with their answers given by the credit counseling agency and decide to take up their service, remember to get a copy of the contract and review it carefully before you sign it. Make sure the contract includes:

Disclosure of the amount of your fee or contribution

Description of the services to be provided

An estimate of the payoff schedule for the debts

Disclosure of the termination provisions of the agreement

Options for resolution of disputes

Warning Signs

Finally, you should be aware of a few warning signs on unethical practice. Get alert with these signs when you interviewing an agency:

Unrealistic Low Monthly Payments

Money Back Offers

Loan Programs

If the promises being made seem like theyre too good to be true, they probably are. Beware.

Summary

You have made the first step towards reaching financial freedom. Now you must make the next big step and choose the Credit Counseling Agency that is best for you. Remember, you want to work with an agency whose goals are in line with yours, NOT theirs.

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About Author

Both Andrea Smith & Cornie Herring are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Andrea Smith has sinced written about articles on various topics from Collection Agencies, Debt Consolidation and Hunting. Andrea Smith is a writer and consultant with Consolidate4Free.com and has been providing consumers and business owners with since 1990. Andrea Smith's top article generates over 27100 views. to your Favourites.

Cornie Herring has sinced written about articles on various topics from Credit Cards, Financial Planning and Free Credit Report Score. Cornie Herring is the Author from . "StudyKiosk-Credit Basics" is an informational website on credit basics and. Cornie Herring's top article generates over 49500 views. to your Favourites.

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