Getting Started With Credit Counseling

Credit counseling is often a difficult and painful subject to approach. Many people do not like to admit they need help with their finances and unfortunately many people allow too much time to pass before seeking such help. Even after the decision to seek help is made, however, it is important to choose the right firm to handle the rebuilding of your credit and your financial reputation.

The vast majority of credit counseling and debt reduction firms are honest and upstanding, but the existence of a few highly publicized bad apples has sullied the reputation of the industry. There are some classic warning signs that you are dealing with an untrustworthy credit counselor. Watching for those signs, and avoiding those firms, is the best way to get the credit counseling you need and avoid any potential problems.

Some signs of a poor quality credit counseling firm include things like:

* Promising too much. A firm that promises to eliminate all your debt, or promises that you can pay back only pennies on the dollar, is probably over promising and will be unable to deliver.

* Employing hard sell tactics. A credit counselor who insists that you sign paperwork on your first visit, before you have had time to shop around, is to be avoided. A good credit counselor will not be afraid to allow you time to shop the competition and make a wise decision.

* Giving you blank forms to sign. A credit counselor who gives you incomplete or even blank paperwork to sign is to be avoided. It is important to read all documents presented to you before signing any type of agreement.

* Not offering budgeting or personal finance classes. The best credit counseling services do more than get you out of your current financial mess. They actively assist you in avoiding such financial problems in the future. They do this by offering classes on such important subjects as making a budget, using credit wisely and protecting your credit score. Be sure to look for such classes when evaluating credit counseling and debt reduction firms.

Finding A Credit Counselor You Can Trust

One of the most important decisions faced by those with financial difficulties is finding a competent and honest debt counselor to help them. There are many fine firms in the debt counseling business, and most are honest and forthright with their customers. The handful of bad firms, however, has served to sully the reputation of the entire industry.

Luckily for consumers, the honest credit counselors are fighting back against these shady operators and helping to put them out of business. While this will help consumers in the future, for the time being it is important to do your research and make sure the firm you hire can deliver what it promises.

One of the most important, although unscientific, measures of a credit counselor's honesty is the vibe you get when you visit. Does the firm seem like a happy, friendly place or do the workers seem drone like and unexcited about their jobs. You can actually tell quite a bit about the quality of a company by the attitude of their workforce. A poorly managed and uninspired company will generally have similarly uninspired workers.

On the other hand, a well managed company will generally have eager, happy employees who are focused on providing the best in customer service. While this is not true in every case, wouldn't you rather work with employees who like their jobs? After all, these are the people you will be working with to restore your credit. If the credit counseling service does not feel right, look elsewhere.

The credit counseling firm's reputation with local industry groups is another important factor in determining their quality and dependability. A firm with an interest in the local community will likely be a member of one or more industry groups, such as the local Chamber of Commerce, Better Business Bureau or similar organization. If the firm claims such an affiliation, be sure to verify their membership.

Another good place to turn when searching for a credit counselor is to family members and friends. Many people have friends or family members who have gone through credit counseling, and these people can often offer the best advice on what to look for - and what to avoid, as well as recommendations for specific firms.

How a Credit Counselor Can Trim Your Credit Card Debt

Credit card debt is one of those things that can sneak up on you when you least expect it. High levels of credit card debt can start through no fault of your own, say using a credit card to pay for an unexpected car or home repair. Once a large balance has accumulated on a credit card, however, it is often difficult to pay off, and it is all too easy for that debt to get out of control.

That is why the credit counseling industry is such an important one for many consumers. The key thing to remember about credit counselors is that they know how to talk to the banks and credit card companies. They understand the terms and the language used by these businesses, and the best credit counselors know how to get results that most consumers would be unable to get on their own.

One of the most valuable services credit counselors perform is getting the banks and credit card companies to reduce the interest rate on your outstanding credit card balance. Simply lowering the interest rate a few percentage points can make the payments on the credit card balance much more affordable, and help the entire balance get paid off a lot sooner. In some cases, credit counseling services are even able to convince the bank or credit card company to eliminate the interest rate altogether, although this is generally a tougher sell.

Another skill the credit counseling service can provide is convincing the credit card company or bank to waive or eliminate certain fees. These fees, usually in the form of over the limit fees, late payment fees, etc., can really add up and make the credit card balance even more unmanageable. By eliminating these fees, the credit counseling service can help consumers get a handle on their debt without declaring bankruptcy or taking other drastic measures.