Consumer credit counseling comes in many different forms and through a number of different kinds of organizations, ranging from attorneys to nonprofit groups. While there are consumer credit counseling agencies that prey on people in financial difficulties with scams that put consumers even deeper in debt, a sound, professional group can offer many benefits to people who are facing money problems that they don't know how to manage.
Step 1
Look for an agency that takes the time to find out what is going on with you. First and foremost, a good credit counselor will ask you numerous questions and request copies of all your earnings statements and bills so that he can get a clear picture of your financial situation.
Step 2
Answer all questions honestly so that you can get clear and concise advice. Credit counselors should offer you a number of options, from consolidating all your debt into one payment that they pay to calling your creditors and trying to negotiate better terms and lower settlements on your behalf.
Step 3
Take home any contracts provided to you by the counselor so that you can read the fine print and all the fees associated with the services being offered to you. Most consumer credit counseling agencies are nonprofits, but that doesn't mean they are free.
Step 4
Sign up for classes and take advantage of the educational portion of the counseling process. A consumer credit counselor should always provide lessons on how to make a budget as well as which creditors to pay off first and how to eventually eliminate debt. Educational resources may include teaching you how to shop better or where you can cut expenses from your household budget, report financial counselors at Debt Help.
Step 5
Find a local office where you can meet the credit counselor face to face. Regulators at the Federal Trade Commission (FTC) report that though there are a vast number of online credit counseling organizations, it is easier to get the answers you need in person. You also can verify the credentials of the organization and the counselor more reliably in person. Credit counselors often can be found at local universities and though credit unions and housing authority agencies.
Tips and Warnings
- Call the Better Business Bureau or your state's attorney general to find out if there are any complaints filed against the company you are considering or if it is under investigation for fraud.
- If a credit counseling service refuses to send you free information about its services or asks you for money up front, FTC regulators say you should find another source of counseling. A reputable company will not require personal information before sending you information.
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