How to Choose a Credit Counseling Agency

How to Choose a Credit Counseling Agency

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If you run into financial troubles, you may find yourself seeking the assistance of a credit counseling agency. However, it’s very important for you to choose wisely. Be leery of any company that makes outrageous claims of increasing credit scores or erasing negative marks on a credit report.

Here are four tips for choosing a credit counseling agency:

  1. Do your research. Check the registries with the National Foundation for Credit Counseling as well as the Association of Independent Consumer Credit Counseling Agencies. Also, ask friends and family for their recommendations.
  2. Make sure you choose an agency that uses certified counselors. It is mandatory for credit counselors to pass a certification exam that tests their understanding in areas such as budgeting, credit and consumer law, counseling and debt management.
  3. The agency you choose should provide more than one debt management option. Your counselor should review all of your options with you, not   just the debt management plan (DMP). A debt management plan is not right for everyone. Legal information website NOLO says consumers should steer clear of any counselor who: recommends the DMP before completing a thorough counseling session; says the DMP is your only option; or says he or she  gets paid if you sign up for the DMP.
  4. Check and make sure the agency has a good record. The Better Business Bureau is a good place to start. See if there have been any complaints against the credit counseling agency. Also check with your state attorney general for complaints or legal actions that have been brought against the organization.