|
Credit Counseling Services Checklist
By: Joel Walsh
There are credit counseling agencies that rescue people from the deepest
financial holes. There are also credit counseling agencies that just shovel in
more dirt. How do you tell them apart?
by Joel Walsh
Signs of a Reliable Credit Counseling Agency
__Better Business Bureau Membership
The service's website should have a BBB logo and a link to their record on the
Better Business Bureau website. Click through the link to check that there are
no unresolved complaints against them. Many people only think about the Better
Business Bureau after they've been cheated, but by then there's not much you can
do. Working with a credit counseling agency that is a member of the Better
Business Bureau means that you can go to them to help mediate any dispute you
might have with the service provider.
__Accreditation
Reputable credit counseling services will be accredited by an independent
nonprofit, just as many schools are. One such accreditation body is the National
Institute for Financial Counseling Education.
__Fees
A good credit counseling agency will charge a small, reasonable monthly fee,
usually around $30. Some also charge a fee upfront, though this fee should be
reasonable (around $50 tops). It may be possible to get a hardship waiver of
these fees if you truly do not have the $30-50.
__Clear Application
The application must clearly say what the fees to be paid are, what the services
to be provided are, and in what timeframe all of this will be provided.
__Reasonable Promises
Run far, far away from any organization that proposes to "wipe out" your debt
for you, rather than simply helping you to repay the debt. Short of your
creditors just deciding to forget about the debt (unlikely), there is no way to
erase debt–even bankruptcy leaves a huge mark on your credit report for ten
years.
True, your car may not go missing from your driveway if you stop paying
unsecured debt (i.e., debt that is not "secured" with collateral, like most
credit cards, unlike most auto loans). But you are still legally obligated to
pay the debt, and the possibility of being taken to court will loom over you.
You will likely be unable to get even "bad credit" financing if you still have
debts in collections–good luck buying a car or house.
Not Necessarily Signs of a Reliable Agency
XX Nonprofit Status
Nonprofit status is essentially a tax designation, not a government endorsement
of a group's mission. There are plenty of near-fraudulent credit counseling
agencies that are registered nonprofits.
XX Respectable Name
Any group can put words like "National," "Alliance," "Assistance," and other
trust-inspiring words in their name. But a name is just a name. Make sure to
check any organization against the list above to make sure they're reliable.
Also try searching for the group's name on a search engine. Don't just look for
a lack of negative reports–that might just mean the group changed names
recently. Instead, look for positive reviews from real people, and preferably
mention on reputable third-party websites, such as news sites.
Ready to find a credit counseling agency? You're in the right place: the web is
full of credit counseling agencies. Just use the checklist above, and you'll
have no trouble separating the saints from the scams.
About the Author:
Joel Walsh has written on credit counseling:
www.debtguru.com [Publish
this article on your website! Requirement: live link for above URL/web address
w/ link text/anchor text: "credit counseling" OR leave this bracketed message
intact. Permalink:
http://debtguru.com/articles/credit-counseling-services-checklist.html]
|