Resources for Credit Counseling

A Guide to Credit Counseling

For individuals that are mired in debt and suffering from overwhelming bills, one option to handle such problems is to engage in credit counseling services. Credit counseling is a practice of educating individuals on how to manage debt and handle their credit. By helping individuals create a debt management plan, credit counseling agencies can help their clients establish financial responsibility.

Services of Credit Counseling

The main services that credit counseling agencies offer cover a realm of financial and money management counseling. One of the main services that an agency offers is to help individuals work their way out of debt. A few of the various services that a credit counseling agency provides include: budget counseling, debt management, and financial education. When choosing a credit counseling agency, find a service that provides a wealth of services, rather than a single one. The number of resources offered can be an indicator of the credibility of the agency.

However, there are a number of fraudulent credit counseling agencies that engage in unfair business practices. Customers should watch out for agencies that offer to completely solve financial problems, such as raising credit scores and providing an alternative to bankruptcy. In general, customers should steer clear of credit counseling agencies that make impossible guarantees and promises.

Tips for Choosing a Credit Counseling Agency

Finding a reputable credit counseling agency can be a daunting task. However, there are a number of ways to find an agency that is ideal for your situation. The following are factors to watch out for when searching for an agency:  

Pricing:
One important component of finding a reliable credit counseling agency is to take a look at their pricing models available. When researching different companies, ask whether they provide different or flexible pricing scales and if there are any fees or surcharges. However, customers should avoid companies that ask for an upfront payment, before any contracts or agreements have been signed.

Reputation:
One of the most important tips when searching for a credit counseling agency is the reputation and credibility of the company. Ask colleagues, friends, and family members whether they have used a credit counseling agency.
Another way to determine whether a credit counseling agency is reputable is to check if they are recognized by national organizations. The National Foundation for Credit Counseling is the nation’s largest financial consulting organization, and can help individuals find a reputable agency in their area. Another organization that provides information on credible credit counseling agencies is the Better Business Bureau. The BBB can help customers determine whether an agency is reputable, or is simply a scam.

Accreditation:
Another good indicator of the reliability of a credit counseling agency is examine whether the service is accreditation. This is important, as accreditation validates the business practices of the agency and ensures that they are up to standard. Customers should avoid agencies that possess self-accreditation or none at all.  Instead, look for accreditation by reputable third-party agencies, such as the Council on Accreditation.