Choosing a Credit Counselor

 

Concerned about news stories of less-than-honest consumer credit agencies taking advantage of those who can least afford it. If you're considering consumer credit counseling, the credit counseling agency should be non-profit. The credit counseling agency should have been in business for at least ten years. The credit counseling agency should be accredited by the Council on Accreditation (COA) or the International Standards Organization (ISO). If they state that they're accredited, make sure the accreditation is current, not lapsed.

The counselors at the credit counseling agency should be certified by an independent organization. If you need help with more than just credit card debt, look for an agency certified by the Department of Housing and Urban Development (HUD). Remember: you are entrusting your personal financial information as well as your money to the credit counseling agency, so take the time to check them out to make sure they're legitimate and reputable.

Here's some advice for scoping out a credit counseling agency. Find your Better Business Bureau on the BBB's Web site and call to ask how many complaints have been filed against the agency you're considering and how many of them are still unresolved. Some complaints are to be expected, but most should be resolved.

Contact the National Association of Attorneys General - the NAAG Web site lists contact information for each state's office of the Attorney General (AG). Call your state AG and ask if any complaints have been filed or legal actions taken against the agency. GuideStar - This online resource provides information on over one million nonprofit organizations, including credit counseling agencies.

Find the agency on the GuideStar site and check for red flags such as exorbitant salaries, nepotism (relatives of the bosses on the payroll), and for-profit companies owned by the boss or relatives of the boss that receive large payments from the agency (some agencies funnel funds out of the non-profit organization to their own or a relative's for-profit company).

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