Choosing the right credit counseling service could be one of the most important decisions you ever make when it comes to your finances. You should look for a company that puts your financial education and goals first. Even non-profit companies can be all about the money if you are not careful.
Not all services are created equal. Here are some questions to ask that should help you find the right service.
What services do you offer?
In addition to various kinds of credit counseling (that is, education about consumer credit, budgeting and paying down debt), some services will also offer debt management or even debt settlement services.
Debt management will allow you to safely pay back your credit card debt at reduced interest rates. Debt settlement might involve taking out a lump sum loan with the goal of paying off all debt and then just paying back the loan, one payment each month. However, this can be risk because they will usually want some guarantee of you being able to pay back the loan (collateral), such as your house. Be clear about the exact services and terms being offered.
What do you charge for your services?
Even though an agency is a "non-profit", they do have to run a successful business and pay staff. That being the case, there will be small fees involved. Be sure you are clear about what the fees will cover. Most states have regulated fees for these services.
Are you an accredited agency? By whom?
The agency you choose should be accredited by a reputable association. Most non-profit consumer credit counseling agencies will hold an ISO 9001:2008 registration, which illustrates the agency's commitment to quality, customer satisfaction, and continual improvement of their services.
Do you adhere to an industry code of practice?
A reputable service will usually adhere to the Association of Independent Consumer Credit Counseling Agencies (AICCCA) code of practice. Also check the service’s Better Business Bureau listing and rating.
How long has your agency been providing these services?
Experience counts when it comes to financial counselling. Check to see how long they have been in business.
Are your counselors licensed and certified?
Reputable consumer credit counseling agencies will ensure that their counselors obtain, and maintain, the appropriate certifications. Common certifications include the Association for Financial Counseling and Planning Education (AFCPE), and the Partnership for Financial Education.
What are the qualifications of your counselors?
Counselors can have one or several certifications depending upon their area(s) of expertise. Many consumer credit counseling agencies provide a variety of services and need to have appropriately certified counselors for each. Look for details at their site about their team or staff.
Can you provide references?
Most legitimate companies should be happy to provide testimonials and references. Check ConsumerAffairs.com., which provides consumer reviews of the agencies and other important details about them. Look up companies like GreenPath or Cambridge Credit Counseling Corp. to get an idea of what the listings look like, and how people find it working with these companies.
Is your bankruptcy counseling approved by the U.S. Department of Justice?
If the consumer credit counseling agency offers bankruptcy counseling services, be sure that they are listed as an approved agency by the U.S. Department of Justice Executive Office of United States Trustees (EOUST).
Any agency claiming to be an approved agency should have this listed on their website, and be listed on the DOJ site. Only approved agencies can legally provide bankruptcy counseling services, which are an essential part of being allowed to file for bankruptcy. After filing, those who have declared bankruptcy will also have to take a debtor education course.
For example, GreenPath and Cambridge are both listed on the DOJ site: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111
Ask these questions to ensure that you get a credit counseling service which is legitimate and right for you.