Stressed about your debts?
Seeking help from a credit counselor may be just what you need to get your credit and your financial life back on track.
A credit counselor can help you review your budget and develop a plan for paying down your debts.
Seek Free & Low-Fee Help
It’s important to limit the costs of a credit counselor. You can opt for a nonprofit credit counselor with a local office or someone who is accessible online or by phone who offers free or low-fee services. Avoid debt counseling companies that charge huge fees for their services.
The National Foundation for Credit Counseling has certified credit counselors available all over the country and is a great place to start your search for a reputable and affordable credit counselor. Another highly reputable organization is the Association of Independent Consumer Credit Counseling Agencies.
Credit unions, universities, military bases and local housing authorities also offer nonprofit credit and debt counseling services.
Questions to Ask a Credit Counselor
Here are some questions to ask a credit counselor before agreeing to pay for their services.
What are your qualifications?
Are the credit counselors certified? Ask for an explanation of their training and background. And you may want to check to see if a credit counselor has any complaints filed against them with the Better Business Bureau.
What kind of services do you provide?
It’s best to ask for this information in advance and before giving a counselor the details about your financial situation. You’re checking them out, not the other way around.
How much do you charge?
Is the first budgeting session with a credit counselor free? How much do they charge for their additional services? Do they offer debt management plans? If so, how is this program structured and how much will you pay for them to talk to your creditors? (When you agree to enroll in a debt management plan, your credit card companies may agree to reduce your interest rates and let you make one monthly payment to the credit counseling agency. The agency, in turn, pays each of your creditors.)
Once you research a few nonprofit credit counselors in your area, choose a counselor you feel comfortable sharing your personal financial information. A good counselor will ask you tons of questions about your bills and budgeting. So choose a credit counselor who puts customer service at a premium and puts your financial interests and not their fees first.