Credit Counseling Agencies - Four Key Questions To Ask
If you've made the decision that it's time to seek out the services of a credit counselling agency, you've got some homework to do. There are far too many disreputable agencies out there, so you are going to want to make absolutely certain that you are going to be doing business with a reputable agency. There are several questions you'll want to ask. In this article, I discuss 4 of the key questions you need to ask.
1. How much do you charge?
True non profit credit counseling agencies and reputable for profit agencies will charge you little or nothing for their services. But, if you participate in a debt management plan, you will likely be charged a small monthly admin fee. But this fee shouldn't be more than $40 or so. This is where the less than reputable agencies make their money, so you'll know straight away if you've contacted one of these places because they'll charge you a significantly higher monthly fee. Run from these people / agencies.
But, on the flip side, some of these disreputable credit counseling agencies have gotten smart and know people are on to their high fees. Instead, they may fee you to death with a multitude of smaller fees. These fees can really add up over time. Before signing on with a credit counseling agency, get a complete list of fees. If they won't give it to you, don't do business with them.
Some states regulate what a credit counseling agency can charge you. It wouldn't hurt to call your state's Attorney General's office to find out if there are limits in your state. Some agencies try to get around this by encouraging you to give them a voluntary contribution. Be very wary of this practice - reputable and non profits will NEVER ask you for voluntary "contributions".
2. How do you pay your credit counselors?>
Reputable credit counseling agencies never pay on commission. They pay hourly or on a salary basis. Steer clear of those who pay via commission because your counselor may offer you services you don't need so they can get the commission.
3. Can I see a copy of the contract that you'll have me sign if I do business with you?
Never do business with a credit counseling agency that doesn't use a contract or one that won't let you look at it ahead of time. Like any service based contract, it should include exactly what services the agency will be providing for you, a time line for the services and any and all fees and expenses that you will be liable for. This contract should also include any guarantees that are being extended to you by the agency. Don't take their word for anything - be sure it's in writing! One last thing that should be included is the name of the counselor you'll be assigned to, along with their contact information.
4. How will you keep my personal and financial information secure and private?
With all the identity theft that goes on these days, you need to feel 100% confident that the credit counseling agency you've chosen to do business with has a very strong policy in place to protect your personal information and financial data secure.
1. How much do you charge?
True non profit credit counseling agencies and reputable for profit agencies will charge you little or nothing for their services. But, if you participate in a debt management plan, you will likely be charged a small monthly admin fee. But this fee shouldn't be more than $40 or so. This is where the less than reputable agencies make their money, so you'll know straight away if you've contacted one of these places because they'll charge you a significantly higher monthly fee. Run from these people / agencies.
But, on the flip side, some of these disreputable credit counseling agencies have gotten smart and know people are on to their high fees. Instead, they may fee you to death with a multitude of smaller fees. These fees can really add up over time. Before signing on with a credit counseling agency, get a complete list of fees. If they won't give it to you, don't do business with them.
Some states regulate what a credit counseling agency can charge you. It wouldn't hurt to call your state's Attorney General's office to find out if there are limits in your state. Some agencies try to get around this by encouraging you to give them a voluntary contribution. Be very wary of this practice - reputable and non profits will NEVER ask you for voluntary "contributions".
2. How do you pay your credit counselors?>
Reputable credit counseling agencies never pay on commission. They pay hourly or on a salary basis. Steer clear of those who pay via commission because your counselor may offer you services you don't need so they can get the commission.
3. Can I see a copy of the contract that you'll have me sign if I do business with you?
Never do business with a credit counseling agency that doesn't use a contract or one that won't let you look at it ahead of time. Like any service based contract, it should include exactly what services the agency will be providing for you, a time line for the services and any and all fees and expenses that you will be liable for. This contract should also include any guarantees that are being extended to you by the agency. Don't take their word for anything - be sure it's in writing! One last thing that should be included is the name of the counselor you'll be assigned to, along with their contact information.
4. How will you keep my personal and financial information secure and private?
With all the identity theft that goes on these days, you need to feel 100% confident that the credit counseling agency you've chosen to do business with has a very strong policy in place to protect your personal information and financial data secure.
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