Credit Counseling: What to look for

When it comes down to finding help with your debt many of us jump at the on the first train that passes offering promises too good to be true. When looking for a credit counselor though it is important to remember that shopping around is allowed and in fact encouraged. Here are some attributes to look for in a good counseling company.

1) Know the difference between credit counselors and debt settlement companies. While credit counselors work with you to immediately alleviate some of the stress of your debt, settlement companies will take your payment and hold on to it until they have amasses a designated amount before they send it to your creditors. Meanwhile you still appear as a delinquent account and receive late fees and home phone calls. 2) Certified counselors are a must and will have proof of accreditation from an independent certification organization (such as the AFCPE). A legitimate credit-counseling agency will not offer a bonus or commission of any sort to their counselors for getting you to enroll in their program. 3) A reputable company will usually be non-profit and have either ISO accreditation or Council on Accreditation thus ensuring they comply with all industry standards and have successfully completed independent audits. 4) Check to see if they have any sort of continuing education plans such as monthly newsletters or training programs for you to take advantage of. If this service is provided it should be given to you free of charge or covered by your other fees. 5) Finally the cost of the service must be reasonable, meaning anything less than $50 per consultation. Of course, "fee" or "contribution" requirements should be disclosed as early on in the relationship as possible.

Here are some big red flags to walk away from when in the market for a credit consolidator: - companies that keep your first payment as a fee: Every payment you make (from the first one to the last one) should go towards paying down your debt. - aggressive sales tactics: Do they talk to you and ask questions about your particular situation or do they jump right in to a sales pitch? - agencies not licensed to operate in your state - don't buy in to promises that are too good to be true (i.e. unrealistically low monthly payments, money back offers, and loan programs)

Though there are obviously more fun things to shop around for, a credit counselor merits some research considering the effect a good one can have on your life. Keep in mind, whoever you commit to should be done wholeheartedly. This is a big step forward towards financial happiness so happy hunting!