3 Tell-Tale Signs You Are Dealing with a Bad Credit Counselor

Dealing with a bad credit counselor can be a troubling experience for you. The promise of getting out of debt can lead you to agree to many things. There are a plethora of unethical companies out there that want to prey on the helpless. They act like legitimate credit counseling companies in an effort to lure unsuspecting customers. Here are a few signs that you are dealing with a bad credit counselor.

1. Upfront Fees

The biggest warning is that a company asks you for an upfront fee. Legitimate credit counseling companies do not require an upfront fee to get you started. Companies will make their money as part of your monthly fee. They do not need a lump sum at the beginning of the process.

Credit counseling companies realize that you can not afford to pay large fees from the beginning. If you could afford this, you wouldn't need their services in the first place. You would simply pay off the debts against you. Therefore, if someone asks for this money, you know that they do not have your best interests in mind.

2. Balance Does Not Decrease

Another common scam among credit counseling companies is to take your money and not pay off your credit cards with it. When you sign up for a credit counseling company, you need to monitor your balances with your creditors. You can usually do this through online account access. Check your balances every month and ensure they are going down. Most of the time a good credit counseling company can get the credit card companies to lower their interest to almost nothing.

Therefore, the majority of your payment should be going towards the principal on the debt. If your balance is not going down by almost as much as you are paying in each month, you should be concerned. Confront your credit counseling company and if they do not answer your question satisfactorily, cancel your service immediately.

3. Bad Reputation

When you are considering getting involved with a credit counseling company, you need to do your homework. Check out online reviews and look at their Better Business Bureau profile. This should give you the information you need about them. If you repeatedly run across upset customers, you should probably stay away from them.


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