Choosing A Credit Counselor
There are over 1000 credit counseling agencies nationwide. It is important to choose the credit-counseling agency that is right for you. The consumer should research a credit counselor before making a decision on joining a program. It is a good idea to look for a company that meets following criteria:
1. The company should be a non-profit company recognized by the Internal Revenue Service (IRS) as a non-profit organization.
2. The company should have a satisfactory record with the Better Business Bureau (BBB). (The BBB only inform you if the company has a satisfactory or unsatisfactory record.) Avoid companies with an unsatisfactory BBB record. The company should provide you with the BBB office that they are registered with.
3. The company should be ISO 9001:2000 registered. The two main accreditation agencies that register credit counselors are BSI and COA. Several major creditors require that the credit counselors they work with are ISO 9001:2000 registered. ISO 9001:2000 registration confirms that the credit counselor has important document and payment controls.
4. The company should provide you with a written contractual agreement and should let you review the contract before signing and beginning the program.
5. A credit counselor should never automatically enroll you in the program without first speaking to you.
6. A credit counselor should spend a significant amount of time with the consumer, and not just set up the debt management plan without explaining the situation.
7. A credit counselor should never require a voluntary contribution in order to help you, or for a credit counseling session.
8. Credit counselors do charge fees. It is important that the company disclose the fees it charges. Look out for additional add-on fees such as a monthly per creditor fee added to the monthly service charge.
9. A credit counselor should make on-time payments to your creditors when your payments to the company are made on time. However, you should not blame the company if your payments to it are late.
10. The credit counseling agency should offer direct payment plans such as automatic withdrawal from your checking account. This makes payments easier for the consumer to make on-time payments each month. It is important to ensure that there are funds in your account for your monthly payments.
11. The credit counseling agency should submit creditor payments electronically whenever possible. This permits faster posting of accounts and reduces the risk of human error by both the credit counseling agency and the creditor. Many credit counseling agencies have set up computer systems that permit quick processing of payments. Avoid companies that only disburse funds to creditors on a monthly or bi-monthly basis. This slow disbursement pace can lead to errors and potential late payments. Remember, some creditors will take away credit-counseling benefits due to late payments. Once these benefits are taken away some creditors will not give the benefits back for many years.
12. The credit counselor should keep you advised of your accounts and send a monthly statement. You should also review your actual creditor statements each month to ensure that your payments are being properly disbursed and posted. If you find any errors or discrepancies contact your credit-counseling agency immediately to correct the problem.