What is Credit Counseling?

Credit counseling services offer trained and certified professionals to evaluate your debt and make reasonable and legal suggestions to you in order to help you improve your situation. They will also assist in certain ways such as helping you to contact credit reporting agencies to dispute information, answering your questions about what your rights and responsibilities are, and assist with getting you on a budget or plan that will eventually lead to freedom from debt issues.

Getting the Right Credit Counseling Service

You should know the difference between those credit counseling services that are mostly after the bottom line and enriching their bank accounts, and those that have a genuine interest in helping consumers like yourself who may be in financial distress and in need of help. One of the likeliest ploys that many people fall for when it comes to credit counseling services is the idea that the company is "non-profit". Do not allow this designation alone sway you into believing that a company has your best interests at heart. The non-profit designation may be given to any company under the right circumstances with only the loosest of financial requirements or regulations.

Finding a trustworthy credit counseling agency is really a matter of shopping around and using referral services such as this one. You should also have prepared a list of qualifying questions to ask the service when you are considering doing business with them:

• Are they registered or affiliated with a national group? There are credit repair and counseling services in the nation that hold their member organizations to the strictest standards including audits, and demands for transparency to their clients and potential clients. One such agency is the National Foundation for Credit Counseling (NFCC).
• Are they a 501(3)(c) nonprofit? As we've discussed before, being a nonprofit company does not automatically mean that the company is trustworthy but it is a good indication.
• Do they offer educational services? A company that is interested in more than just taking advantage of those desperate to solve their credit issues will offer a variety of services, such as budget plans, bankruptcy pre-filling education as required by law, assistance with those who have no debt and just want to manage their money well, and assistance for first-time home buyers or car shoppers.
• Are they accredited? 9 times out of 10 the answer to this question will be an immediate and empathic "yes!" but don't take their word for it. They may have "accredited" themselves or even formed a bogus company to do it for them. You should see if they are with a nationally known body such as the Council on Accreditation.

Most importantly, you should feel comfortable before choosing your credit reporting agency. If they are engaging in high-pressure sales tactics or are pushing you to sign up and pay fees, then you might want to think twice about using them. As a final measure, before signing up with them, do a little research on the Internet by typing their company name into a search engine and seeing what others who have used their services have to say. After you have decided on a counselor, are you going with debt consolidation or negotiation? There is a difference and you can find the difference out with our help.