Good credit counseling agencies educate and assist borrowers who are in financial distress.  They provide information, guidance, and most importantly – solutions.

Their services usually include:

• Money management education
• Budget management guidance
• Debt management counseling (often including a debt
•     management plan)
• Referrals to other agencies and financial service
•     providers, and 
• Foreclosure prevention counseling (if the counseling
•     agency is HUD certified)
•  

How do you know when it’s time to seek help?

When it seems that no matter how hard you try to dig

yourself out of debt you never make any progress; you worry constantly about making ends meet and you can’t sleep at night; you find yourself in a bad situation that’s not getting any better and you don’t see any light at the end of the tunnel – then it’s time to get help. A good credit counselor can help you build a plan to get out of debt, and more importantly, teach you skills to better manage your finances going forward. 

There are literally hundreds of credit counseling services out there and all of them would like to help you – for a fee. The good news is, most credit counseling services are reputable, charge reasonable fees, and work hard to help you regain your financial footing. The bad news is, there are also unscrupulous agencies out there, feeding on consumer fear, and just itching to get your money. How many times have you seen an email like this in your in-box: “Get Out of Debt Fast!”? Less reputable agencies give questionable advice, fail to provide the services they promise, and charge high fees. Real debt relief takes perseverance and discipline. Short of winning the lottery, there are no fast or easy ways to get out of debt. 

How can you tell the good counseling agencies from the bad? 

Better credit counseling agencies employ certified counselors who have passed an exam that tests their knowledge and understanding of counseling, effective budgeting, credit and consumer law, bankruptcy, and debt management. Check the Association of Independent Consumer Credit Counseling Agencies (aiccca.org) and the National Foundation for Consumer Credit Counseling (nfcc.org) to see if your credit counseling service is listed.  Both organizations test members for quality, financial soundness and ethical standards. 

Also look for accreditation by the Council on Accreditation or the International Organization for Standardization. Achieving accreditation through these agencies requires passage of a rigorous test. 

If your concern is housing related, such as how to avoid foreclosure, choose an agency that is also certified by  the U.S. Department of Housing and Urban Development.  You can find HUD-certified credit counseling agencies by going to HUD.gov; or by contacting HOPE NOW, which is an alliance formed by HUD, mortgage companies, and investors, to provide free foreclosure-prevention guidance. For information, visit hopenow.com, or call 888-995-HOPE (4673).