How to Choose a Credit Counseling Agency

Choosing a credit counseling agency correctly will protect your identity and financial health. Many credit counseling agencies have predatory lending practices because they know their customers are generally in vulnerable financial positions. You will need to aggressively seek to protect yourself from these practices by diligently researching any agency and paying close attention to all contracts you sign. The best way to select good credit counselors is to use a referral.

Ask Friends & Family

You may be surprised to find that a number of your immediate associates have gone through credit counseling. It is easy to feel alone when you are approaching the situation, because typically financial stress can take a toll on your life. However, keep in mind credit counseling services exist because this is a common problem people face. By openly discussing the options you have with friends and family, you may find a referral from a trusted individual. You can ask questions in person about their experience with the agency and what they would recommend doing the same or differently. 

Seek Advice of Accountants & Attorneys

Your inner-circle of advisors will also have effective recommendations. First, they will advise you on the positive and negative aspects of entering credit counseling. They can review your financial situation and discuss options such as bankruptcy, credit counseling and debt settlement. Because these individuals likely have a personal relationship with you, they are more able to offer exact advice. They also will not be the ones profiting on your choice of a counselor, meaning their advice can be less biased. 

Do Online Research

Online research is very effective in finding user reviews and scam reports. Check with your local chamber of commerce and the Better Business Bureau to see if any reports have been filed against the company. You can also check the company's URL to determine how long the website has been registered, where it is registered, and potentially who owns the site. If any of this information is inconsistent with what the company is telling you, it can be a red flag you should go elsewhere. 

Verify all Information

Verify the company's stated name and business address against records with the state. Each company needs to have a business license in order to work with you. That license is issued by the state where the company operates. You can typically verify this online, but placing a phone call may further allay your concerns. An hour on the phone is well-worth the time to protect you from fraud or predatory lenders. 

Speak with a Representative

Many credit counseling agencies now offer online services. However, you should be able to speak with your account manager when you have questions or needs in the future. Never sign an agreement or provide personal information until you have spoken with a representative and understand the terms of your agreement with the company. You may be prompted to enter a social security number or other information into a site before you speak with someone, but you should not do this until a contract has been signed.


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