How to Find a Trustworthy Credit Counselor
Credit counseling can be extremely valuable when you’re facing a financial setback. Many organizations that provide this service are legitimate, but not all of them. Some fraudulent services collect fees upfront and then disappear. Others claim they’ve negotiated a reduced interest rate, demand that you send them money to settle your debts, and then pocket your cash without contacting your creditors. Here are some tips for finding a trustworthy credit counseling service.
1. Request a referral from your financial institution.
Generally speaking, your bank or credit union can recommend a credit counseling service its staff trusts. UW Credit Union offers a no-cost credit consultation where a financial specialist reviews your credit report with you.
UW Credit Union members also have free, confidential access to credit counselors and online tools from GreenPath Financial Wellness, a nonprofit organization designed to assist people facing financial difficulties. With help from these resources, you may discover strategies for avoiding bankruptcy, ways to lower your loans’ interest rates and more.
2. Ask questions.
Contact each organization you’re considering and gather details that help you get a clear picture of its work. Questions like these can be helpful:
- What services do you offer?
- What are your counselors’ qualifications?
- Are your educational materials free?
- What do you charge, and what are the fees for?
- How will you keep my information secure?
- Do I need to sign a contract?
- What if I can’t afford to pay for your credit counseling service?
- Will you help me make a plan for preventing future financial problems?
As you ask questions, verify that the organization offers a range of services, including budget counseling and debt management classes. Make sure any promises are documented in writing. For additional screening questions, visit the Federal Trade Commission’s web page on credit counseling.
3. Be skeptical of services that guarantee results or demand fees upfront.
You have many credit counseling services to choose from, so there’s no need to choose the first one you contact. Do your homework, be picky and look for red flags such as charging for educational materials. If it sounds too good to be true, it probably is.