How can I find a legitimate credit counselor? (2024)

FAQs

How can I find a legitimate credit counselor? ›

Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate non-profit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.

The price is clearly stated up-front and there are no hidden fees. No significant consumer complaints have been filed against the agency or its counselors. You can check this with the Better Business Bureau, your state Attorney General or local consumer protection agencies.

An agency should be able to show you that they're certified and licensed to provide services in your state. Then ask what services they offer, what fees you'll be expected to pay, and how they safeguard your personal information. If a credit counselor can't answer these questions or puts you ill at ease, keep looking.

Credit Counseling Payment Programs. This is a hard figure to track since the credit counseling industry does not publicly report their success rate. But industry insiders report success rates of 20% to 25%.

Customer Satisfaction and Reviews

American Consumer Credit Counseling has rave reviews and excellent ratings everywhere you look: Better Business Bureau: 4.97 stars based on 674 reviews; A+ rating and accredited4. Google: 5.0 stars based on 2,861 reviews7.

Hidden risks of consumer credit counseling

Upfront and monthly fees: Even nonprofit agencies may charge fees that add to your financial burden. Less flexibility: Debt management plans can restrict your ability to manage your own finances.

Look for an organization that offers a range of services, including budget counseling, and savings and debt management classes. Avoid organizations that push a debt management plan (DMP) as your only option before they spend a significant amount of time analyzing your financial situation. Do you offer information?

Credit counseling offers borrowers a way to repay their debt through a credit counseling agency. It also offers advice regarding your debt and broader financial situation. You should consider credit counseling and debt management plans when your debt is overwhelming and you can't manage your debts.

How to get a 750 credit score in 4 months? ›

Under debt management plans credit counselors usually do not negotiate any reduction in the amounts you owe - instead, they can lower your overall monthly payment. They may do so by getting the creditor to increase the time period over which you can repay a loan. They may also get creditors to lower the interest rates.

Does a Debt Management Plan Affect Credit? Working with a credit counselor or starting a DMP won't have a direct impact on your credit scores, though creditors may add a note to your credit report that you're using a DMP to pay the account.

Not directly. While merely talking to a credit counselor won't impact your credit score, taking action on any debt management plans they recommend could.

Besides bankruptcy, a Consumer Proposal is the only method in Canada for reducing a balance owing on government debts. Credit counselling plans are severely limited in the types of debts they cover. They may help you consolidate only basic unsecured consumer debts such as credit cards, lines of credit and loans.

Credit counseling organizations are usually non-profit organizations that advise you on managing your money and debts and usually offer free educational materials and workshops. Debt settlement companies offer to arrange settlements of your debts with creditors or debt collectors for a fee.

Debt counselling can help your credit score.

When you enter the debt counselling process, creditors can no longer add any further negative information to your credit profile because you will now be under the protection of the National Credit Act.