How to Choose a Good Credit Counseling Company

Most often the process of choosing a good credit counseling company (CCC) turns out to be a very difficult thing to do since a large number of companies that proudly call themselves “non-profit” turn out to care about their own bottom line much more than about representing the interests of their clients. A report by US Senate investigators published in 2005 stated that some of the new CCC’s that had been operating in the industry for a relatively short time were working according to a completely different for-profit business model that brought large amounts of money to their affiliates without damaging the charitable status of the companies themselves. On the other hand, this report extolled the principles of the National Foundation for Credit Counseling (NFCC), saying that their application throughout the credit counseling industry would definitely decrease the rate of abusive activities undertaken by unfair CCC’s.

Basically, the main thing that you have to do when considering a credit counseling company that you want to sign in with is learning whether it is a member of the NFCC or not. This will help you understand whether this particular company meets the high quality and ethical standards of the Foundation or not. You should also remember to ask the representative of the company whether it is accredited by some reliable third party or not.

The following points will also help you to choose which credit counseling company to stick to. Make sure you read all of them carefully, since that can be the vital starting point of your attempts to resolve your debt.

1) Don’t hesitate to contact the Better Business Bureau and other reliable third parties in order to learn more about the company you consider. There are a significant number of independent and governmental organizations specializing in customer protection by means of collecting customers’ complaints about the activity of certain companies and making this information available to the public.

2) Make sure that all the payments that you send to your credit counseling agency according to your DMP (Debt Management Plan) schedule are IMMEDIATELY distributed among your creditors. Some unfair CCC’s may either take some part of these payments as a fee or a “free-will donation” or hold them in for some time for their own purposes. The concept of time is very important since the repayment of the debt IN FULL ACCORDANCE WITH THE SCHEDULE is the key element of a successful DMP.

3) Never believe those credit counseling companies that promise to improve your bad credit history or your credit score and things like that. A successful DMP that one can rely on is a REALISTIC one first thing. In most cases, the big promises turn out to be nothing but an unfair advertisement means that doesn’t do any good for the customer in the future.

4) Pay attention to the length of the offered counseling sessions. Sure, different agencies offer sessions of different duration – but a customer should always be aware of the fact that it will take a credit counselor quite some time to understand his/her financial situation to the fullest extent, which definitely can’t be done in the course of a 10-minute conversation. Usually the members of the NFCC let the first counseling session last for about 90 minutes or so.

5) A good credit counseling company is a company that offers the full range of services instead of just trying to promote Debt Management Plans that they can profit from. Apart from the DMP, the clients of the companies included into the NFCC get full reviews of their budgets and individual recommendations based on their financial situation.

6) A good credit counseling company will agree to work with all of their client’s creditors at once. Some CCC’s are funded by certain banks and for that reason they may refuse to work with the creditors that don’t support them financially. You shouldn’t expect any credit counseling company to be able to make all creditors recognize your DMP program – but at least they should try to.

7) A good credit counseling company should offer a reliable level of protection for their customers’ funds that they transfer to the creditors. A CCC itself should be bonded or insured in order to save its clients’ money from its own financial difficulties.