Many Americans feel they’re destined to struggle with their debts all alone. But they shouldn’t. In fact, credit counseling agencies exist specifically to help borrowers with debts understand their financial situations and options.
Can credit counseling really help borrowers better their personal finances? According to research cited by the FDIC, consumers who receive credit counseling “have statistically significant improvements in debt reduction” compared to those who aren’t counseled. What can credit counseling do for borrowers?
The study outlines a few potential benefits:
- Bring more awareness to the reality of household finances
- Help boost financial literacy for more informed decision-making
- Boost support and accountability while managing personal finances
- Use debt management to favorably change the “composition or cost of debt”
Reaping these potential benefits from consumer credit counseling starts with choosing the right person.
Here are some tips on how to go about evaluating a credit advisor.
Know Your Debts & Needs
It’s difficult to find a well-matched professional if you’re not even sure what you hope to gain from your sessions. Be prepared to communicate your challenges and goals. The more you can tell a potential advisor during an initial consultation, the more closely you can see whether he or she aligns with your needs.
This is a time to get specific. Do you need help with general budgeting and reducing credit card debt? Are you specifically looking for pre-bankruptcy counseling? Are you in need of assistance when it comes to avoiding home foreclosure? Are you a viable candidate for a credit card consolidation strategy?
Vet Agency and Counselor Qualifications
Another facet of choosing an effective credit counselor is vetting the qualifications of that person, and the agency the person represents.
A good rule of thumb is to start your search using a database of industry accredited agencies. For instance, agencies that are certified as members of the National Foundation for Credit Counseling must pass annual audits and operate according to strict standards. For example, such agencies must do an in-depth review of each borrower’s financial situation before enrolling the borrower in a debt management program. This ensures that consumers get the most from their experience, while helping to weed out scam companies.
After checking out an agency’s credentials, you’ll also want to interview any prospective counselors about their work experience and professional qualifications. These candidates should have no problem providing this information early on in your conversation, whether or not you agree to enroll.
Make Sure It’s a Good Match
On a more personal level, you also want to make sure you feel comfortable communicating with your counselor. As NerdWallet advises, you want to make sure a counselor is a good fit for your needs and goals. So, be sure to ask the counselor about their approach to working with clients.
Use the initial free consultation as a barometer for how well you get along with a counselor and how well you believe an individual can help you with your financial situation.
Consider How Much You’ll Pay in Fees
While the first meeting should be free, you may face fees if you decide to enroll in a debt management or debt consolidation program with them. Avoid nasty surprises down the line by asking about any and all fees up front. Evaluating a consumer credit advisor means doing your research on the process, the agency, the individual, and their fee structure before signing anything.
- How To Properly Maintain Your HVAC System - February 24, 2021
- Speed Your Level Up in Shadowlands - February 23, 2021
- Dog Owner Challenges - February 19, 2021
- Are You Suffering From a Car Accident Back Injury? - February 18, 2021
- How to Be in Control of Your Health and Wellbeing: A Guide to a Better Lifestyle - February 17, 2021
- Why Should You Choose Indian Rummy Over Gin Rummy? - February 16, 2021
- How to Make Moving Wooden Toys - February 15, 2021
- Why should you travel a country in ferry - February 14, 2021
- What You Should Know Before Using Your Pickup to Tow - February 13, 2021
- 4 of the Strangest Things to Happen in Basketball - February 12, 2021