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How to Choose a Credit Counselor

Financial Adviser and Happy Couple

With the help of a qualified, well-trained credit counselor, you can gain the financial freedom for which you’ve been searching. The road to that point is not easy – oftentimes, you must complete hours of counseling sessions and curb your spending to fit your budget – but once you are in the clear financially, you will be happy you put in the hard work.

What Is a Credit Counselor?

A credit counseling organization – which may or may not be nonprofit – works with you in a confidential setting to solve your financial problems. While many such organizations are in operation across the United States, not all are legitimate. In fact, many of them charge high fees and act outside of your best interes, all in an effort to gain hold of your hard-earned money.

Depending on your schedule, personal preference and general availability, you can choose to obtain the services of credit counselors through one-on-one, in-person counseling sessions; on the Internet; or over the telephone.

Where to Look

Credit counseling organizations are in every city. According to the Federal Trade Commission (FTC), “Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs.” With so many organizations to choose from, it behooves you to do some serious legwork to find the credit counseling organization that works best for you and your needs.

Ask the Right Questions

When deciding with which credit counselor to partner, make certain you have a clear grasp of the services they offer. The FTC suggests looking for an organization that offers a variety of services, including budget counseling and savings and debt management classes. That way, you can obtain a wide array of professional services without needing to involve multiple third parties – which could lead to varying opinions on how to effectively and quickly resolve your financial issues.

The key to successfully solving financial issues through debt management and other means is getting sound advice and information. Ask potential credit counselors whether their organization provides free educational materials and consultations. Steer clear of any organization that charges for educational materials and other information related to your case. If service fees apply, be certain to obtain a specific price in writing, including whether the fee is a one-time set-up fee or an ongoing monthly fee. If prices are not clear or are described as “sliding,” choose a different organization.

The FTC strongly encourages consumers to ask potential credit counselors whether they are licensed to offer services in the state in which they are operating. Not all credit counselors are licensed, so be certain not the miss this step. In addition, ask the counselor to disclose their qualifications, including whether they are accredited or certified by an outside organization. If they are accredited, be certain to obtain the name of the organization where they underwent training. This information can help you evaluate whether the counselor is best suited to your needs. The FTC suggests using an organization whose counselors are trained by a nonaffiliated party.