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How to choose the right credit counselor?

How to choose the right credit counselor?

There are so many companies out there claiming to help you get out of debt. Because there’s a slew of scams out there, it’s crucial to look for a credit counselor with a discerning eye.

Here are some things to look for.

  • Make sure the credit counseling organization is accredited by the National Foundation for Credit Counseling.
  • Check with the Better Business Bureau and make sure the organization is in good standing.
  • Ultimately, try to find a counselor you feel comfortable with.

Working with a nonprofit credit counseling organization is not the same as working with a private debt-settlement firm.

A debt-settlement firm is typically a private company that works to settle your debt with a creditor. They may charge fees upfront and promise to help you pay off debt. Beware of debt settlement companies, and if you’re unsure of the difference between a debt settlement company and credit counselor, review this chart by the Consumer Financial Protection Bureau.

Remember that many initial credit counseling sessions are free and only charge a fee if a debt management plan is an appropriate next step.

Unfortunately, there are scams out there.

“If you feel pressured by the representative to stop paying your bills and enter their program, you may have found a for-profit debt-settlement company posing as a credit counselor — so be careful,” says Nitzsche.


Bottom line

Whether you simply have a few questions or would like extensive help managing your financial situation, a credit counselor can help.

Working with a credit counselor could help you access financial tools and resources to stay in good standing with your credit. Just be sure you’re working with an established nonprofit organization that has your best interests at heart.

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