Credit Counseling Services: Are They Worth It?

Consumers struggling to meet monthly bills may be in need of credit counseling services. It is important that you find the right counselor, or service, that can help you get to a manageable debt point in your life.

Choose Wisely

The right credit counseling service can help your financial profile improve, if you choose wisely. You need to select a counseling service that will properly advise you about effective spending and saving methods.  The services can also enhance your credit score.

You want the credit counseling service to provide you with education geared toward learning how to establish a realistic and workable monthly budgets.  They can teach you how to keep track of your bills, while managing where your money goes. Also, you may need a credit counseling service to devise a repayment plan that will successfully reduce your debt. Although you have an immediate need to get out of debt, a good credit counseling service will instruct you about proper money management techniques to avoid the debt trap in the future.

What To Seek In A Credit Counseling Service

A good counseling service will offer free information about what you can expect and what services can be performed. They will insist on written contracts that spell out all expectations about payment terms and all costs, how long it will take to realize the goals set for your financial relief and all guarantees provided. The contact information for all personnel involved in the process, along with their credentials and references, should also be provided to you in your agreement.

Make sure the services you receive are personalized for your situation. Do not accept any generalized evaluations or “over-the-counter” solutions. A credit counseling service will afford enough time, usually an hour, to evaluate your personal situation, gather the necessary information and return with a customized program to help you become debt free.

Stay away from organizations that pay counselors on a commission fee basis. This type of compensation arrangement turns credit counselors into salespeople who may focus toward selling services that benefit them financially first as opposed to devising a customized and personalized plan that fits your particular needs.

When hiring a for-profit counseling service, make sure you do some comparison shopping avoiding companies that “take” your first monthly “debt” payment as their fee.

What Is a Good Counseling Service?

The best credit counseling services will have a verifiable track record of satisfied customers who have received detailed, personalized services from credentialed, referenced advisers. The primary goal is to help with debt relief, but any good counseling service will also provide financial management education to help clients avoid their personal debt pitfalls. A reputable consumer credit counseling service will allow potential clients the opportunity to compare the services they are offering with any competitors before agreeing to a contract. Avoid companies that use tactics designed to get you to sign at the initial contract. Many times, unscrupulous companies employ emotional techniques, designed to get your business. A good professional counselor will advise you to compare several companies first and will display confidence.

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