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Chapter 12. CREDIT COUNSELING AND CREDIT... > How Do You Choose a Credit Counselin...

How Do You Choose a Credit Counseling Agency?

  1. Do some comparison shopping. Check out a few different agencies and do not give them any personal financial information about you before you have made up your mind.

  2. Limit your choices to credit counseling agencies that are affiliated with either the NFCC or the AICCCA and which adhere to their standards.

  3. Check out the particular company with the consumer protection division of your state attorney general's office and the Federal Trade Commission. Make sure there are not a lot of complaints lodged against them.

  4. Go to their offices. Do not pick a company entirely through the Internet or over the phone.

  5. Make sure that they offer serious counseling and not just debt management plans. See what is the range of services they provide.

  6. Check out the costs. Make sure you know what all the fees are. If you are in particularly dire financial straits, see if they will waive their fees.

  7. Confirm that they do not share any of your personal information without your approval. Such information sharing increases the danger of identity theft.

  8. Make sure that the agency's employees are not on commission for signing you up for a debt management plan.

Will Working with a Credit Counseling Service Hurt Your Credit?

Well, it certainly won't hurt it as much as having a bankruptcy on your record for ten years. Your FICO score does not consider the fact that you are dealing with a credit counseling service in determining your credit score. It neither helps you nor hurts you. It does not take the proverbial rocket scientist to guess, however, that failing to pay your bills or being late with your payments will hurt your credit score. It is important to note that regardless of what your credit score is, the ultimate decision as to whether or not to grant you future credit will be made by the bank, credit card company, or whatever other company with which you may be dealing at the time. They all have their own criteria. Some consider your working with a credit counseling service, particularly if you adhere to the program, as a positive indication that you are taking affirmative steps to control your debt problems and that you are acting responsibly.



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