Sometimes life hands you lemons, like when your car breaks down and you’re forced to put expensive repairs on your credit card. Sometimes you go looking for lemons, applying for a loan to pay for college or a beautiful three-bedroom ranch. Finances are complicated and only get more overwhelming with time.
Thankfully, life also gives us consumer credit counseling to help us prioritize our financial responsibilities. Whether you’re drowning in credit card debt or simply looking for some financial guidance, consumer credit counseling is there for you.
What is Consumer Credit Counseling?
Consumer credit counseling agencies are typically non-profit organizations that advise individuals on debt reduction strategies, student loans, mortgages, and more. Their varied services can help you out of a financial crisis, help you plan for retirement, or just help you develop a budget that works.
How to Find a Consumer Credit Counselor?
When looking for a consumer credit counselor, you need to be wary of scams. Lots of individuals and organizations prey on those in need of debt help. Look to the following sources for consumer credit counselors you can trust.
- Your state attorney general
- Local consumer protection agency
- United States Trustee Program list of consumer credit counselors
- Department of Justice list of consumer credit counselors
- The National Foundation for Credit Counseling
- The Financial Counseling Association of America
You should also look at customer reviews and take some time to call the agency in question. A reputable agency will be willing to answer all of your questions.
What Questions Should You Ask?
Start by knowing why you are looking for consumer credit counseling. Not all agencies are qualified to provide the same level of service. Are you looking for debt reduction services? Do you need balancing loans? Figure out what you want to get out of the services to ensure that the company in question is the right fit.
Questions to ask:
- What services do you offer?
- Do you have any educational materials?
- Will you help me develop a plan to avoid future problems?
- What are you counselor’s qualifications?
Make sure you understand the fees involved. Even non-profits need to charge money in order to cover their overhead costs and pay the counselors under their employ. If the company requires you to pay before they are willing to provide any specific information about their services, then look somewhere else. Most reputable consumer credit counseling organizations will be upfront about their fees and have resources for people who can’t pay. After all, if you’re looking for help with a debt reduction plan, you probably don’t have too much cash to throw around.
Questions to ask:
- What are your fees?
- Do you offer help for those who can’t afford fees?
- Will I have a formal written agreement detailing all fees?
Know What Motivates Them
Finally, it’s worth asking how the consumer credit counselors are compensated. Counselors who earn more money when they get you to sign up for services don’t necessarily have your best interests at heart. The most motivated counselors are paid a flat rate and may receive additional compensation based on customer satisfaction.
People looking for debt solutions are targets for scams and sales ploys. After all, you’re desperate to fix your financial troubles, making you more likely to make risky agreements if someone promises a solution. Know that nobody can make your debt disappear. Debt reduction is a methodically and painstaking process, one that a true consumer credit counselor can help you navigate.