Information from the Washington State Department of Financial Institutions

How Credit Counselors Can Help with Money Problems

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What Do Credit Counselors Do?

Credit counseling agencies work with you to solve your financial problems. These organizations offer services through local offices, the internet, or via phone.

Credit counselors will discuss your financial situation with you, and help you develop a personalized plan to solve your money problems. Counselors typically negotiate lower payments with your creditors, and then make payments using money you send them each month.

Find A Credit Counseling Agency Near You

The National Foundation for Credit Counseling allows you to search for counselors near you via their websites.

Questions To Ask Credit Counselors

Ask these questions when seeking a debt counselor:

  1. What are your fees?
    Ask what fees you will be charged. Specifically, ask about any set up fees.
  2. How will the debt plan work?
    Ask for details on how the debt management plan will work. Which debts can be included in the plan and will you receive balance updates?
  3. Ask for a contract.
    All verbal promises should be in writing before you pay any money.
  4. Are you accredited or certified?
    Legitimate credit counseling firms are affiliated with either the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.
  5. Check if any complaints have been filed.
    Check with the Better Business Bureau to see if any complaints have been filed against the counseling service.

Debt Consolidation vs Credit Counseling

Many people confuse debt consolidation services and credit counseling services. Debt consolidation typically involves taking out a new lower interest loan to pay off multiple high interest debts. The consolidation loan is generally secured against the borrower’s assets such as a home or a car.