Maybe you’re having difficulty keeping up with those monthly credit card bills. It could be student loans or even those old medical bills. Either way, you’re in way over your head and feel a bit overwhelmed. You may be looking for some direction in terms of managing your debt but, you’re not quite sure what to expect from a credit counseling agency. Here are three things you’ll need to look for from a credit counseling agency.

Make sure your credit counseling agency is accredited   

A legitimate credit counseling agency must be accredited. Non profit counseling agencies must obtain and maintain accreditation by the Council on Accreditation, Inc. (COA). COA is an independent third-party not-for-profit accrediting organization that review non-profits counseling agencies to ensure that they are compliant with respect to their practices. You can also cross-check the National Foundation for Credit Counselors (NFCC) before engaging with anyone who says they are a certified credit counselor.  Furthermore, do not hesitate to ask any counselor whether or not his/her agency is accredited. This should give you some sense of confidence that you’re making the right choice with a particular credit counseling agency and that your personal and confidential information will be handled in accordance with privacy laws.

Make sure your credit counseling agency does not charge you fees  

Most credit counseling agencies are non-profit organizations that receive funding to provide counseling or debt management services to consumers. In other words they do not necessarily charge you a fee for counseling services. In addition, they are often incented by creditors since it’s in a creditor’s best interest to ensure their receivables (your debt) is collected. This scenario benefits everyone involved. Keep in mind however, once you sign an agreement with a credit counseling agency your monthly payments to each of your creditors will be processed through the agency usually electronically. You are also contractually obligated to follow through on the payment schedule. Once the agency receives your payment they in turn submit payments to each creditor on your behalf as agreed. Review your credit counseling options to ensure you’re not paying any fees.

Make sure that your credit counseling agency will actually save you money.  

Saving money is one of the major positives in choosing the right credit counseling agency. Because these agencies have the ability to negotiate with creditors to help lower your rates, payments, stop late fees and over-limit fees they are able to help save you money. You’ll be more likely to pay off your debt much faster. Another point here is that while you’re under agreement with the agency you will not be able to assume any new debt, which is not bad given that you’re still getting back on good financial footing. On the down side however, your credit score will be negatively impacted in the short term or while under the agreement. Reason being, consulting with a credit counseling agency is viewed as a red flag by creditors. They see it as one step away from bankruptcy. The silver lining in all this is that, as long as you are able with the help of the agency to get out of debt you’ll be in much better shape financially and your credit score will definitely improve over the longer term as well. The key is to ensure that you choose the right credit counseling agency to begin with.

Below are the links to a couple of accredited credit counseling agencies.






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