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Credit Counseling Facts

Many consumers who want to escape from debt prison look into credit counseling as a possible solution. Here's the lowdown on credit counseling and if it helps or not.

Be an Informed Consumer

If you want to escape from debt prison, credit counseling is one tool you can use in tandem with a solid debt consolidation program to become debt-free. However, like with consolidation, you need to go into the process as an informed consumer. Here is what you should ask before you choose a credit counselor:

  1. What services are offered? Some counseling programs will offer budget advice, money management, tips on how to save, and programs that help you work out a repayment plan with your creditors. A credit counseling service cannot help you escape from debt prison unless they first spend a significant amount of time evaluating your finances. Make sure they do a thorough evaluation and offer a wide enough array of services to meet your needs.
  2. Do you have a license to practice in my state? You want to be sure you are dealing with a licensed, legitimate service. Companies without licenses tend to want to make a huge profit under the table rather than help you escape from debt prison.
  3. Can I get free information on your services? Don't bother with companies that charge just to get more information about the services they offer.
  4. Do I have to sign a contract or other formal agreement in writing? Avoid committing to any services over the phone. Before you become a customer, you should make sure that you get all of the company's promises in writing. Be sure to read over any documents you sign carefully so you know whether the service will actually help you escape from debt prison. Don't do business with services that pressure you to sign immediately.
  5. What are your customer satisfaction levels like? If the company has successfully helped other consumers escape from debt prison, then the service should be able to boast high levels of customer satisfaction. You can find this information out from your state's Attorney General, the Better Business Bureau, or a local consumer protection agency.
  6. How will you keep my personal information secure and private? Make sure your counseling service has certain safeguards in place to keep your sensitive information confidential and secure.

If you have more questions, look through our frequently asked questions for some answers.