How to Choose a Credit Counseling Agency

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There can be cases when a person becomes unable to pay off his or her debts. This is a certain situation known bankruptcy, which can be very harmful for the debtor. One of the ways to overcome occurred problems is to choose a credit counseling agency, which will help you establish a workable budget, keep track of your bills and manage your money. In some cases the agency can even work out a repayment plan with your creditors.

Once you are choosing a credit counseling agency, you will be asked to provide all related information on your expenses, incomes and debts. The counselor analyzes the information, discusses the situation with you and provides assistance to address your financial problems. Suggestions may include participation in educational classes like how to work out a debt-management or repayment plan, etc. But the main question that should be addressed by you is how to choose a reputable credit counseling agency.

Tips to Choose a Credit Counseling Agency

If you choose to work with a credit counseling agency, do your research on selecting one which is reputable, experienced and consumer-centered. The agency of your selection should:

• Satisfy clients;
• Provide individual approach to every client;
• Provide important tools to achieve financial security;
• Assist in making appropriate financial choices.

While doing your research, go through these steps:

1. Evaluate advertisements- if an agency has a big advertising budget, it doesn’t necessary mean that it is the best agency. Good counseling agencies rely on the referrals of previous clients and don’t offer their services via emails, phone calls, etc.
2. Speak with several counselors- ask your friends or relatives for recommendation if they have ever dealt with credit counselors or who they would choose if they needed debt management advice. You can also use Yellow pages to contact credit counselors.
3. Select the agency which is licensed or accredited- many states require that the counseling organization be registered or already obtained a license before providing counseling services, making payment plans and budgeting services. Check with the agency whether it is accredited or licensed or not in order to meet your State’s requirements. Ask the agency if they are a member of the National Foundation for Credit Counseling or the Association of Independent Counseling Credit Agencies. Always double check this information at the web site.
4. Consider counselor’s qualifications- ask the counselors whether they are certified and by whom. Try to search for counselors who are certified by an outside organization.
5. Select counselors who provide personal approach- general approach to the cases is not the right way you should follow. Find out whether the counselor provides personal approach to your case or not. Be careful and evaluate the chances to avoid problems in the future.
6. Ask about privacy and security policy- this is a very sensitive question that should be addressed before working with a particular agency. Ask the agency about its privacy policy.
7. Keep formal relations with the agency- select an agency that keeps relationship with their clients in a formal written form, i.e. agreement, contract, etc. This is considered a formal document where the terms of payment, contract dates and all related information on both sides are involved.

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