Needing a good credit counseling service and actually finding a good service are two different matters. So, how can you find a good counseling service you can be happy with?

The first thing you should check is that they belong with the BBB, the Better Business Bureau. When looking at their website look for the BBB logo and make sure that it links to the Better Business Bureau. When you go to the BBB site to check out a credit counseling service, find out if there are any unresolved issues or complaints against them.

One thing to keep in mind is that a lot of people only go to the Better Business Bureau after they have a problem with the credit counseling agency. Preventing future headaches by checking with the BBB “before” any trouble begins will always be to your benefit. This makes it easier for the Bureau to mediate any disputes you may have with the service.

In many cases, if the credit counseling service is a reputable firm, they will be accredited by an independent non-profit company like the “National Institute for Financial Counseling Education.

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 small amount of funds available.

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Once you’ve made your choice, you will need to fill out one of their application forms. Make sure you read that application. It must clearly say:

  • - what the fees to be paid are
  • - what the services to be provided are
  • - and in what time frame the services will be provided

FAIR WARNING – If the organization proposes to “wipe out” the debts for you, then run away as fast as you can. A good credit counselor should only HELP YOU to repay your debts. On the otherhand, if your creditor just decides to forget about your debts, then right on – go for it. But this is highly unlikely.

Debts are not very easy to erase. Even if you declare bankruptcy, your credit report will have a big bad mark on it for ten whole years.

If your debt consists mainly of unsecured loans like credit cards, then one advantage (if that’s what you want to call it) is that your possessions won’t get taken away. If the debt is made up of secured loans, like home mortgages or automobile loans, you could end up walking to work and sleeping under a tree.

Either way, you are still legally obligated to repay your debts, and the possibility of being taken to court will be forever a part of your dreams until it’s taken care of. It may even become harder to get “bad credit” financing if you still have outstanding debts that are not taken care of.

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Filed under: Debt-Credit-Counseling

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