Why Do I Want Credit Counseling?

“Debt, n. An ingenious substitute for the chain and whip of the slave driver.” Ambrose Bierce

At one time or another, we’ve all found ourselves at the wrong end of the month with little-to-no-money in our account. Occasionally, overspending happens when an unplanned expense arises such as car or home repairs, medical bills or other such catastrophes. Sometimes, whether due to inattention to available funds and spending or a series of financial adversities, we can find ourselves in such a deep hole that it seems impossible to see a way out. Credit counseling is available to help regain perspective, plan and execute a strategy to repair the financial damage and educate the consumer so we’re not easily caught in that snare again.

What Makes a Good Credit Counseling Service?

These murky financial counseling waters are fraught with scam artists. First off you should know that ANY service that offers a quick, painless fix is going to take you for a ride. Fixing poor credit is a task that requires a desire to change, self-discipline to stay the course when temptations arise and endurance to stick to the plan. Second, be wary of any service that wants to immediately push you into a debt management plan.

As a whole, reputable credit counseling services should be non-profit however, that’s not a guarantee of a quality service. According to Travis Plunkett, legislative director at Consumer Federation of America, “Nonprofit doesn’t mean cheap or affordable, or even good.” The best advice is to shop around. There’s nothing worse than buying something when you’re desperate. Generally, a frantic person tends to take the first semi-plausible option that’s thrown at them. We’ve done some shopping and developed our own list of requirements of a good credit counseling service. The best sites will share a number of common features and these are the standards we held credit counseling sites up against. At TopTenREVIEWS, We Do the Research So You Don’t Have To.™

Accreditation & Affiliations
A reliable credit counseling service will be affiliated and accredited with a number of professional organizations. Among the most notable are:

• American Association of Debt Management Organizations (AADMO)
• Association for Financial Counseling and Planning Education (AFCPE)
• Association of Independent Consumer Credit Counseling Agencies (AICCCA)
• Better Business Bureau
• Council on Accreditation (COA)
• International Standards Organization (ISO)
• National Association of Certified Credit Counselors (NACCC)
• National Foundation for Credit Counseling (NFCC)

Another barometer is the length of time the service has been in business, obviously the longer the better (and more experienced). Visit the Better Business Bureau’s site (bbb.org) and check any credit counseling service you’re considering. Among other things, the BBB report will list the original date of startup for the company.

Education
This area deals with the educational resources available to the user. The best credit counseling sites will have a comprehensive library of materials including articles, blogs, recommended books, informational links, newsletters, classes, online classes, quizzes, videos and webcasts designed to teach the consumer about a variety of important financial subjects. The more the user knows and understands about a subject, the more successful they will be at employing the techniques of financially responsible decision making. Our top-rated sites: AAA Fair Credit Foundation, Springboard and Money Management International make the educational aspect of their counseling services paramount.

Tools
Along with educating the consumer, credit counseling sites should also offer a healthy compliment of financial tools in the form of worksheets and calculators to help the user understand, compute and plan for all sorts of economics-related decisions. These should include: auto, budget, college planning, mortgage, retirement and tax calculators as well as loan payment, credit card interest, debt-to-income and net worth calculators and worksheets. The best sites will also have resources available to be used in the home and classroom to teach the rising generations about financial responsibility.

Services
Credit counseling is the first step in rehabilitating a financial life. There may be a need for a debt management program, housing counseling and, as a final resort, bankruptcy counseling. If your situation is such that bankruptcy is the only option left, the courts will order you to complete bankruptcy training and receive a certificate of completion in order to move forward with the legal proceedings.

Ease of Use & Support
Finally, if the site is difficult to use or they only offer one or two ways to get in touch with them it’s not worth the hassle of trying to wade through the confusion. You should also be able to access the majority of the site’s educational materials without signing in or creating an account.

A note about fees: Credit counseling should be free. A customary fee to set up a debt management plan is around $50 and the monthly maintenance cost should be no more than $25 if this is what you decide to do. If the company you’re considering doesn’t (or won’t) divulge their fee schedule, go somewhere else.

Crushing debt affects all aspects of an individual’s life. It’s impossible to be happy and healthy at the same time you’re worrying about how you’ll pay the mortgage, buy groceries and provide other life necessities. Take advantage of the benefits of credit counseling services to improve your own financial health and boost your physical and emotional well being too.