If you’ve been browsing our website, you might have noticed that we offer many tips to help you manage your finances and a lot of great advice about credit counseling and debt management.
However, if you’re like many of our potential clients, you probably have questions about the credit counseling process or what happens during a credit counseling session. Popular questions include, “How can I tell if I need credit counseling?” and “What companies offer reputable credit counseling services?” We hope we can answer your credit counseling questions with this in-depth (and very lengthy) blog post.
Frequently Asked Credit Counseling Questions:
1. Is It Safe To Work With A Credit Counselor?
Yes! Like many other types of counselors, credit counselors are licensed by their state to provide credit counseling services. They must undergo extensive background checks before they can work in the field. Even so, the best way to know you’re working with a reputable company is to check out their accreditation with the NFCC (National Foundation for Credit Counseling) and the Council on Accreditation (COA). Both the NFCC and the COA offer an extensive list of criteria that indicate who’s qualified and reputable. Most people prefer to do online credit counseling or telephone sessions, so you don’t even have to meet your counselor face-to-face unless you’d like that type of service.
2. What Is The Difference Between Credit Counseling And Consolidation?
Many different types of credit counseling services are available, and each may help you in another way. It’s essential to understand the differences between these types of counseling, so you can make informed decisions about which type is best for your needs.
Credit counseling should always be free. You should look to work with a Non-Profit Credit Counseling Agency because there are never any fees for their credit counseling services. Be wary of places that charge an upfront fee or fees based on your income. These counselors will work with you to develop a customized action plan for managing your debts, including information on which debt products are used in conjunction with one another. A Debt Management Program may be the best option for you, or you might have to deal with Bankruptcy if the debts are too great or there’s little to no income. Your counselor should be honest and give you their professional opinion, and then ultimately the final decision is up to you.
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3. What Should I Consider When Choosing A Debt Management Program?
Before choosing a Debt Management Program, it’s important to understand the benefits and limitations of this type of assistance. Here are some things you need to know before making your final decision:
4. How Do I Choose The Best Debt Management Company?
There are many different ways to choose the best debt management company. Ask around, or check with other companies that provide similar services to see which ones they recommend in your area. Also, remember that your credit union or bank may have recommendations for local counselors you can trust. You can also try calling your creditors and see if they have a relationship with a credit counseling agency that they can recommend. You’ll always want to check out the NFCC and COA for accreditation and licensing on the agency you’re thinking about using.
5. What Are The Benefits Of Using A Credit Counselor?
One of the benefits of using a credit counselor is that these professionals can help you develop a personal debt repayment plan that meets your individual needs and circumstances. This advice and assistance are offered at no charge, making it an attractive option for many people who cannot afford the upfront costs of Bankruptcy or Debt Settlement. If you do decide that a Debt Management Program (DMP) might be a good fit, ask about fees for that service. Every non-profit agency charges fees for their DMP. The fees can sometimes be waived if the person meets the Federal Poverty Guidelines or if they just aren’t able to make ends meet with the fees. A good non-profit agency should never turn down someone for not being able to pay the monthly service fees.
6. How Do I Find A Credit Counselor Near Me?
It’s usually best to find a credit counselor by checking out the NFCC’s website (National Foundation for Credit Counseling). If you would prefer to do some more research online, here is a good resource to find the best credit counseling agency for your needs: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111
7. What Are The Different Credit Counseling Services Available?
There are many different credit counseling services available in the market today. You must understand your options before choosing a credit counselor to work with.
When working with a credit counseling agency, choosing one that specializes in your financial needs is essential. If you’re having trouble finding one that fits your needs and circumstances, a reputable non-profit service agency such as NFCC can recommend a counselor who is best suited for your situation.
8. How Can I Tell If I Need Credit Counseling?
There are several clear warning signs that indicate you might need credit counseling. For instance, your outstanding debts and spending habits exceed your income, and you don’t know what to do about it. This is one of the most common reasons for seeking credit counseling.
If you’re a recent college graduate, find yourself financially severed from your parents (perhaps for the first time), and are making an entry-level salary, then you might be staggering under the weight of student loans — and possibly frivolous spending habits. This is a popular topic – in fact, the Washington Post runs a series on life as a new graduate every year – and as Generation X continues to replace Baby Boomers in the workforce, there can only be more public discussion about the financial woes of the young adult set. These are just a few examples of how and where credit counseling could help.
9. I Lost My Job! Can Credit Counseling Help Me?
Life happens. Maybe you lost your high-paying job, and have never quite made the same salary since. Perhaps you bought a new home on a subprime mortgage, and you’re scrambling frantically to sell or foreclose. Maybe you or a close relative has fallen ill, and you’re drowning in medical bills. Whatever your situation, you’re finding now that you don’t earn enough money to pay your bills or pay off your debts.
The bill collectors are already calling, or you’ve been informed that most of your accounts have been turned over to collections. Credit counseling can most definitely help you in this case.
If the above statement describes your situation more closely, you are already in deep financial trouble. You have had difficulty paying your bills for quite some time now and are truly beginning to reap the consequences of avoiding payment. It’s important to speak with a certified credit counselor ASAP to see what options are available to you.
10. Can Credit Counseling Help With Medical Debt?
Medical bills are one of the biggest hurdles for Americans today. A telephone survey of more than 1,000 low-to-middle-income households demonstrated that 35 percent of individuals in debt had medical bills that contributed to that debt. Those households with medical debt carried an average debt load that was 46 percent higher than other households.
Credit counselors can help you handle your debtors while you work out a debt management plan and learn ways to be able to pay your bills again. You have options now, too. Justin Harelik, a journalist for Bankrate.com, advises that people who have bills in collections have several options, including negotiating with debtors, filing for bankruptcy, hiring legal help, and looking into credit counseling services.
11. Who Offers Reputable Credit Counseling Services?
The United States Federal Trade Commission (FTC) expressly states that credit counseling agencies engaging in fraud or trickery are in clear violation of the law. So, before you sign up for any credit counseling services, read the following article on the FTC’s website: https://consumer.ftc.gov/articles/choosing-credit-counselor
A reputable credit counseling agency is an agency that bears accreditation. Advantage CCS is a member of the National Foundation for Credit Counseling (NFCC), a non-profit that dictates the standards to which reputable credit counseling agencies must adhere. A visit to the NFCC official website demonstrates that NFCC member agencies are those agencies that have been shown to engage in reputable credit counseling practices. The NFCC also sets the standards for credit counseling training. Therefore, should you sign up for Advantage CCS credit counseling sessions, your counselor will have gone through many hours of professional training.
Advantage CCS is accredited by the Council on Accreditation (COA). They enforce the standards for credit counseling agencies, and they require the agencies to remain transparent and accountable in all activities. Those credit counseling agencies that are accredited by the COA and NFCC are reputable and trustworthy agencies.
The National Foundation for Credit Counseling has strict standards to which it holds all of its members. Member counseling agencies are forbidden from discriminating against anyone seeking counseling services. They are required to offer complete, one-on-one counseling and debt management services, and must document client progress. All counseling interactions with clients must be kept confidential and monetary fraud or abuse — including trading leads with debtors or charging illicit fees for counseling services — is expressly prohibited.
12. What Are Warning Signs Of Disreputable Agencies?
Disreputable agencies can look very different from the outsider’s perspective, but closer examinations of how they do business will usually unmask their fraudulent ways.
First, avoid any credit counseling service that promises to make all of your financial problems go away almost overnight – especially if they charge outrageous “starter” fees. The goal of a credit counseling service is NOT to make your money problems and debts disappear overnight. Instead, you will acquire the tools you need through counseling to make changes to your financial situation yourself. A Debt Management Program is usually around 3-5 years depending on the amount of debt and what the consolidated monthly payment is going to be.
The language fraudulent agencies use most often:
- “Pay now, we’ll erase your debts!”
- “Our credit counseling services eliminate your money problems within a month!”
- “Bye-bye debt! Sign up with us, and for a fee, you can wave your debts goodbye!”
- “We’ll help you get rid of your debt overnight!”
Ask how much money a credit counseling service charges for their counseling sessions. There are agencies out there that can charge you thousands of dollars for services – and that’s money you’ll never see again. Credit counseling services like Advantage CCS help you to pay back the money you owe, and their credit counseling sessions are always 100% free. There are fees associated with Debt Management Programs. All agencies (even non-profit ones) charge fees for their Debt Management Programs because of the time and service that goes into contacting creditors, sending proposals to the creditors, creating monthly statements, reviewing clients’ credit card statements, doing monthly disbursements, etc.
Conclusion –
We hope you’ve found the information in this blog post about the most common credit counseling questions we hear to be extremely helpful. Feel free to give us a call at 866-699-2227 or visit us online at https://www.advantageccs.org/ to find out more about AdvantageCCS and our non-profit credit counseling services!
Check out our Credit Counseling FAQ page for even more popular credit counseling questions: https://www.advantageccs.org/credit-counseling-faqs
