If you’re looking for debt assistance, a reputable credit counseling service could offer the help you need. Nonprofit credit counseling agencies offer these services for free to anyone in need of financial help. While these are good resources to use, there are also scams and for-profit companies trying to make money off of your debt that you should watch out for. ACCC explains how to find reputable credit counseling services and how to tell if it’s legitimate or a scam.
How to Find Reputable Credit Counseling Services
If you’re doing your research online, check the website of the credit counseling agency you would like to use. Are they a nonprofit? What is their rating with the Better Business Bureau? Are they a member of the NFCC (National Foundation for Credit Counseling)? If this information is not on their website, that may be a red flag. Also, check to make sure that they are really a credit counseling agency and not a debt settlement company. While the two might sound like they offer the same services, there are several important differences. Debt settlement companies are for-profit companies that can charge high fees for their programs. Their role is to help you settle on your debt for less than what you owe, which can significantly decrease your credit score.
Nonprofit credit counseling agencies, on the other hand, offer a free credit counseling session to go over your financial situation and determine the best course of action to tackle your debt. They go through your income, expenses, assets, and liabilities to help you come up with a budget. They also offer free educational materials and resources, and may enroll you in a debt management program. This program allows you to pay off all the debt you owe, unlike debt settlement, but with lower interest rates and waived fees. This program does not hurt your credit like debt settlement does.
How to Get Started with Credit Counseling
It’s easy to get started with reputable credit counseling services. All you have to do is call! This is the time to ask them any questions you may have about their services. Asking questions about their fees, licensing, and the credit counseling process can help you determine if they are reputable or not.
If you’re struggling to pay off debt, ACCC may be able to help. Schedule a free credit counseling session with us today!