Debt Consolidation and Credit Card Counseling

Choosing a Reputable Credit Counselor
As you have undoubtedly noticed, there are many Websites online devoted to credit counseling. Many of them represent reputable firms, while other are run by scam artists who are determined to take advantage of customers who may already be desperate. Such scams can involve secured credit cards with hidden (and often astronomical) fees, home equity loans offered by firms that really just want to foreclose on your home, or mortgages with hidden balloon payments. There are probably as many scam artists out there as there are legitimate credit counselors.  How can you select a reputable credit
counselor, and what can a credit counselor do for you?

A good place to start when considering a local credit counselor is to check with your state’s Attorney General’s office. If the agency in question has a reputation for taking advantage of people, the Attorney General’s office will know about it.

You might also check with the local Better Business Bureau. They can tell you if there have been any complaints filed against the firm in question. Your local Chamber of Commerce might be able to help, as well, but sometimes scam artists join the Chamber of Commerce in order to gain legitimacy. Keep in mind that the lack of complaints to the Chamber of Commerce, Better Business Bureau or Attorney General’s office doesn’t mean a business is honest, but an overall lack of complaints is typically a good indicator. You should always be suspicious when dealing with anyone regarding financial matters.

And of course, personal recommendations are always welcome. If you have friends, acquaintances or  coworkers who have experience with a credit counseling firm, then talk to them. There is no substitute for personal experience.

When you meet with the credit counselor, ask them up front for their list of fees, and make certain that you obtain that list of fees in writing. Beware of any firm that requires a high deposit or monthly fees. It’s best to shop around and talk to several different credit counselors before selecting one. That way you can find someone you can afford and someone with whom you feel comfortable.

Ask the counselor if they work on commission. Some agencies are only interested in obtaining as many clients as possible, and aren’t looking out for your best interests. You want to find a counselor who is genuinely interested in helping you get out of debt. Make sure that you can contact your counselor during business hours, and always ask for references.

Ask if they also offer money management plans. You want to get out of debt, but you also want to stay out of debt. Learning effective money management is the key to staying out of irresponsible debt.

If you are already in financial trouble, you certainly don’t want to invite more into your life. Choose your credit counselor carefully. 

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