Credit Counseling Agencies

Credit Counseling Agencies

Questions to ask Credit Counseling Agencies

Before you select a credit counseling agency ask for information on the following:

  • Are the credit counseling agency services confidential?

  • Will the credit counseling agency devise a plan tailored to fit your needs?

  • Are the credit counselors certified?

  • Are budget and credit education opportunities offered with the agency?

  • Will your funds be protected? How?

  • Is the credit counseling agency accredited?

Credit Counseling Agencies

If you are eye ball deep in debt and unable to pay your bills, credit counseling can be a financial lifesaver. A credit counseling agency may arrange a debt repayment plan, a creditor-approved arrangement that allows you to repay your unsecured debts at reduced interest rates. In these plans, you deposit money each month with the credit counseling agency. Your deposits are used to pay your creditors according to a payment schedule the counselor develops with you.

A debt repayment plan does not erase your credit history. Under the Fair Credit Reporting Act, accurate information about your accounts can stay on your credit report for up to seven years. In fact, creditors may report an account in financial counseling as payments missed, or that there are write-offs. But, a demonstrated pattern of timely payments should help you qualify for credit in the future.

If you want to work with a credit counseling agency, interview several. Check them out with your Better Business Bureau, state Attorney General, and local consumer protection agency. Any reputable Debt Consolidation agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If not, consider that a red flag and go elsewhere for help.

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