How To Choose The Best Credit Counseling Company

How to choose a credit counseling company

Worried about paying debt? Can’t seem to make a workable budget? Then you should consider credit counseling services. Most of the credit counselors are non-profit offering credit counseling services at local offices, online, or through the phone. But it is better to find a service that offers credit advice in person. 

Many companies operate non-profit credit counseling programs like many universities, credit unions, military bases, housing authorities, etc. But also note that non-profit status does not offer a guarantee that credit advice is affordable, free, or even legitimate. Some credit counseling companies charge high fees, which they may also hide. Others might also urge you to make voluntary contributions that can cause more debt on you. 

What is credit counseling? 

A reputable credit counseling agency can advise you on how to manage your debts and money. They will help you to develop a budget, and they also offer free educational workshops and materials. According to your financial situation, their credit counselors are certified and trained in money and debt management issues, credit consumer, and also developing a budget. As they will discuss your entire financial situation with you and help you in developing a personalized plan for dealing with your money issues. 

Related: How To Pay Down Credit Cards

Choosing a credit counseling company

A credit counseling company should send you their free information about the services they provide without knowing your situation. If any firm that you choose does not then consider it a red flag and look for another company.

Once you have prepared a list of the credit counseling companies you might do business with check each one out with the State Attorney Lawyer and Local Consumer Protection Company. They will let you know that if any of the consumers have filed a complaint about them or not. If they have no complaints then don’t consider that it is a guarantee that they are legitimate. After you have completed your background investigation, you will want to interview the candidate too. 

Related: How To Pay Off Your Mortgage Early

Questions to ask credit counseling company

Here are some questions that will help you to find a suitable and best credit counselor for yourself: 

  • What type of service do you offer?

Always look for a credit counseling agency that offers various types of services including saving management classes, budget counseling, debt managing, etc. please avoid those organizations that push you to a debt management plan as your only option left without knowing your complete situation and discussing your financial term. 

  • How much does one charge for these services?

Make sure whether or not they charge a set-up or monthly fee. Mostly try to get a specific price quote in writing.

  • Do you offer all the information or data required? 

Ask whether or not educational material is available for free. Attempt to avoid the organizations that charge for the information. 

  • What if I’m not able to pay your fee or do any contribution?

If a company is not ready to help you or if you can’t pay the fee then seek some other organization for help. There are other resources you can look into to help you with debt, credit repair, and budgeting that you can research on your own to repair your financial situation. A good first step is to work on repairing your credit score as that can hurt you financially by not being able to get loans, a mortgage a new car, or credit cards with rewards.

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Questions to ask for providing security

  • In addition, to help me resolve my problem will you also assist me to develop a budget management plan?
  • What is the qualification or ability of your counselors? 

Are they certified by any outside organization? If yes, then by whom? If not then how are they trained? Always attempt to select an organization whose counselors are trained by a non-profit party. 

  • Are you licensed to offer or supply your services in this state?
  • Will I have a proper formal written agreement with you?

Make sure that you don’t ever sign something before you read it completely and carefully. Always note that all the verbal guarantees that are made by the credit counseling agency are written within the agreement or the contract. 

  • How does your staff get paid?

Are they paid more if I sign a service? If I contribute to your organization or pay the fee? Yes, then consider it as a red flag and look elsewhere for help. 

  • What assurance do I even have that my information like my name, address, phone number, and also financial information will be kept confidential and secure always?

Related: Should You Use A Credit Repair Company?

Best Credit Counseling Companies

Best Credit Counseling Companies

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products however our opinions are our own. 

GreenPath Financial Wellness

  • Over 60 years of trusted experience in the debt management industry
  • Free debt counseling to help you understand your debt and set goals $0-$50 plus a monthly fee up to $75
  • Bankruptcy support $35 fee
  • They help you with homeownership questions about foreclosure, reverse mortgages, and home buying assistance $199 fee
  • Student loan counseling $200 fee
  • budgeting assistance
  • A+ rating on Better Business Bureau

Consolidated Credit

  • Providing personal credit counseling since 1993
  • A+ rating on Better Business Bureau
  • Partners with Army OneSource and the U.S. Department of Veterans Affairs to help military personnel and their families improve their financial life
  • Offers free standard credit counseling services, debt counseling, and debt management programs.
  • Fees are based on how much you owe as well as how many accounts need to be paid off.

American Consumer Credit Counseling

  • A nonprofit founded in 1991
  • A+ rating on Better Business Bureau
  • Extensive FAQ page that breaks down every detail of the services they offer
  • Includes financial calculators, videos and resources on budgeting, retirement planning, identity theft, financial information for Veterans, and much more.
  • Debt management programs are a one-time payment of $39 plus a $5 to $50 monthly maintenance fee.

Related: How To Get Personal Loans

What are debt counseling programs? 

How to get out of debt

If you have financial problems that are too serious, and they stem from too much debt, or you are unable to repay your debts then credit counseling companies are recommended. Once you find a credit counseling agency, you can enroll in a debt counseling program. The credit counseling companies does not only offer only debt counseling program and it is also not for everyone. Don’t ever sign up for these programs unless a certified credit counselor has spent time to go through your financial situation and offer you a piece of customized advice on managing your money. Sometimes even a debt managing program is right for you, but still, a certified counselor can help you to create a budget and teach you money management skills. 

How does a debt counseling program work?

In this program each month you will deposit money to the credit counseling organization. It will use your deposit money to repay your debts like student bills, credit card bills, medical bills, etc. A successful program requires you to make regular, timely payments. It can take 48 months or more to complete your program. It is better to ask your credit counselor how long it will take to complete the program. You have to also agree that you will not apply or use for additional credit when you are in this program.

How to make debt counseling work for you?

Make sure that you pay your bills until the creditor approves the plan. If you stop making payments till the time you will face penalties, late fees warning, and also negative entries in our credit card.

Always contact your creditor and make sure that they have accepted the proposed plan. Call each of your creditors every month so that you can make sure that the agency is paying them on time. Review your monthly statements too for keeping a record and to ensure that all your debt is getting payments on time to avoid any warning, penalty, or negative credit entry. 

How much does credit counseling cost?

Some credit counseling services will be at no charge to you as they offer free advice about debt and finances with you so you have a better understanding. Other credit counseling services that really help you go through your finances one-on-one will charge anywhere from $45-$75 for an upfront fee and then charge $40-$75 monthly.

Typical prices for services such as reverse mortgages include a one-time fee of $200, pre-purchase counseling for $150, and student loan counseling for $90.

Best Get Out Of Debt Companies

PayOff – Best For Credit Card Debt

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CuraDebt – Best for Debt Settlement & Tax Relief

  • Debt relief since 2000
  • #1 Debt Settlement Company 12 years in a row from TopConsumerReviews.com
  • Debt settlement for unsecured debts for credit cards, private student loans, and personal loans
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  • Medical debts, business debts, collections, repossessions

To get out of date and increase your financial situation you can use debt counseling services to help you with free advice and resources. Others ways you can improve your debt is to use consolidate your debt, apply for personal loans or increase your credit score.

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