The Truth behind Non-Profit Credit Counseling Organizations

Your first step to financial well being is to take control of your consumer debt. There are many credit counseling and debt management options – however, there are some that may be detrimental to your financial health. It is important to research and ask questions, even if a credit counseling service purports that it is non-profit. Once you have done your research and found the consumer credit counseling agency that you are comfortable with, you should be on your way to achieving your financial goals. This article will help you choose a legitimate one.

Together with your counselor, you will review all of your financial records and come up with a viable option for debt management that is unique to you. The debt counselor will help to create budgets, spending plans, and the actions you must take to overcome your debt challenges.

Choosing reputable credit counseling services

There are many credit counseling agencies these days to choose from, non-profit and otherwise. Be sure that you pick one that is accredited by the NFCC, as they regulate the consumer counseling service industry. Alerts have even been issued by the IRS and the Federal Trade Commission for consumers to be very cautious when choosing a consumer credit counselor.

For more than a decade, the agency named Consumer Credit Counseling Services has dominated the credit counseling and debt management industry. Today, especially in our current economic climate, there are many companies cashing in on the demand for debt counselors. However, not all of these organizations are reputable. Some charge extremely high fees, and they do not even pay your bills on time. Trust and legitimacy are huge issues, especially since these debt management counselors hold your financial life in their hands.

Credit counseling agencies are able to negotiate special programs and lower payments with creditors to save your financial health. When you choose a reputable credit counseling company, it could be one of the biggest decisions of your life. Here are some ideas to help you choose:

• Ask as many questions as you can about the repayment plans and how secure of an agreement will it be.
• Check what their fees will encompass and get it in writing. Read agreements carefully.
• Check with the Better Business Bureau for complaints, and if the issues were resolved or not.
• Check that they are accredited by the Association of Independent Consumer Credit Counseling Agencies.
• Do not work with any company that says that they can erase your bad credit history, guaranteed. This is a common scam or, at the very least, a shady business practice. Legitimate credit counseling agencies will focus on your finances and debt load. There are legitimate credit repair companies that will focus separately on your bad credit.
• If they are non-profit, ask them where their funding comes from and who regulates them.
• Are their counselors trained and certified; if so, by which counseling association?
• Make sure that they tell you when your payments are due and when they will be paid.

Understanding the powers and limits credit counselors have

Creating a budget based upon your income and expenses, a certified credit counselor will ascertain a feasible payment plan that you can afford. Once all have agreed on the plan, you send your monthly payments to the credit counseling agency, and they pay your creditors. They can often obtain lower interest rates and waive fees, since many will have business relations with creditors.

Things they can do:

• Stop collection and debtor calls.
• Help avoid bankruptcy and foreclosure. (It is actually now law to visit a credit counselor before declaring bankruptcy.)
• Reduce or eliminate late fees and over-the-limit fees.
• Decrease your interest rates.
• Lower your total monthly payments.
• Make a schedule for you to pay off all of your debts and collections within three to five years.

Things they cannot accomplish:

• Erase bad credit. Accurate bad credit can only be diluted with time and the practice of good credit.
• Settle for less than agreed – that is defined as debt negotiation, which can be very costly.
• Do magic with your credit report; only making consistent payments and time will improve your credit.

Non-profit credit counseling programs are not necessarily non-risk

There are a myriad of non-profit credit counseling services available, but this may not necessarily mean they are the best company for you. Regardless if you choose a non-profit organization or a business company, it is important to work with trained and certified counselors that are backed by the National Foundation for Credit Counseling.

An excellent organization is the Consumer Credit Counseling Services, and they are located almost in every city. These credit counseling agencies usually obtain their funding from government financing, and you will be charged less. A good indication of the reliability and professional standards of conduct and ethics is that they have fair fees and provide educational materials. However, because they rely on government funds, there will be limitation in the services they can offer you.

Consumers have many options when it comes to credit counseling companies offering many of the same services. In fact, there are many debt management businesses that provide exceptional service to help you manage your credit woes. Because these businesses are not limited by government funds of a non-profit organization, they are able to offer you additional services, such as online counseling, money management coaching, and more personalized customer care. There are for-profit credit counseling organizations that offer online services, as well as face-to-face consultations.

Whether you choose a profit or non-profit credit counseling program, online or face-to-face, it is important that you use good judgment. Research thoroughly and ask questions; do not be hasty in making your decision – after all, it is your financial life and your future that is at stake.

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