Finding a community credit counseling agency probably isn’t hard – what’s difficult is knowing whether the agency you’ve chosen is legitimate, reliable and reputable. There are plenty of credit counseling agencies who are little more than scammers – and are playing on your need to get help. It’s important to learn how to find the right credit counseling company for your needs.
First, the name “community credit counseling” is a bit of a misnomer. There are national companies that have local branches throughout the United States. The best known name is Consumer Credit Counseling Services, or CCCS. However, you still need to be careful, as some companies not affiliated with CCCS have taken the same name, and refer to themselves as Consumer Credit Counseling or other names that are close enough to cause confusion. The CCCS is a non profit company, and have been approved by the U.S. Bankruptcy Courts for counseling that is required prior to filing bankruptcy.
There are many other non profit companies to choose from however. You can find many listed with the National Foundation for Credit Counseling, a membership organization that is a nonprofit and has admission criteria for member firms. Don’t always assume that because a company is not for profit credit counseling, that they will offer you the best deal, or get you the best credit help. Many still charge fees, and do not have the long term history that others have which would make them better equipped to help you in this trouble economic environment. Be sure to ask for references, how long the company has been in business, and how much they charge, if anything. They should also help with the management of your general finances – such as teaching you to do a budget, figuring out where you can cut you expenses, and so on.
Family credit counseling is also important. For privacy reasons, some counseling agencies will only with you and a spouse if you are on the same paperwork. For family financial counseling, there may be other programs you want to investigate, if you want your children and other family members to chip in with this effort to turn things around.
One thing you should know is that when you work with CCCS or other companies, this fact will go on your credit report. As a result, lenders will look at this as a negative mark on your credit. In addition, even after you leave the program and have paid your scheduled debts as arranged, this can cause lenders to turn you down for months or years afterward. This is a fact not many people know, an find out the hard way.
To avoid this situation, you should remember that much of the work these agencies do you can do yourself. Some companies also will focus on your credit cards mainly (CCCS for example gets funding from the credit card industry). When it comes to mortgages, car loans and so forth, they don’t work with secured lenders or bank loans as much. They can help you stay out of bankruptcy, but just remember that their goal is to keep you out of bankruptcy and thereby help the credit card companies – even if it is not necessarily in your interest to do so.
So if the agency wants to charge fees you can’t pay, you might want to start by taking a few months and seeing if you can’t get yourself on a budget, talk to your creditors and start repayment plans on your own. Talk to community credit counseling firms and get the details on what they can provide, but take your time and consider all of your options before signing up.