9 Questions to Ask a Credit Counselor
When you need to get on a Debt Management Plan, you may need to have a credit counselor help you through the process. Selecting a credit counselor can be a difficult process, but the Federal Trade Commission has a list of important questions to ask a Credit Counselor to make the selection process easier for you.
1. What services do you offer?
It’s important to work with a debt counseling company that offers a variety of services. If you are able to work with a debt counselor that can help you manage your budget and organize your savings, you may be better off. It can also beneficial if your counselor is certified in consumer credit, money management, debt management and budget management.
Because your counselor will work with you to improve your full financial situation, it can be helpful if your counselor has experience and training in other areas to give you a well-rounded approach. This could help you get out of debt now and avoid debt in the future
2. Are you licensed to offer your services in my state?
Because many states require credit and debt counselors and counseling agencies to register and maintain their license, it’s important to make sure the agency has received proper state certification. Research whether your state requires debt counselors to hold specific licenses and then make sure your counselor is approved to offer credit and debt counseling services in your state.
3. Do you offer free information?
There are many organizations that do not charge for information about their services, and it is recommended that you visit a service that offers free information.
4. Will I have a formal written agreement or contract with you?
It is recommended that you don’t commit to participate in a Debt Management Program over the telephone. You should get all promises in writing in case you run into problems down the road. As with all agreements, you should review all documents carefully before signing. Don’t be rushed into signing any paperwork, as this could be a tactic to make you commit before you are ready.
5. What are the qualifications of your counselors? Are they accredited or certified by an outside organization? If so, which one? If not, how are they trained?
It is recommended that you use an organization whose credit and debt counselors are trained and accredited by an organization that isn’t affiliated with creditors. The training of your credit counselor is important, and you should research where the counselors received training prior to committing.
6. Have other consumers been satisfied with the service that they received?
After you found a counseling organization with which you are comfortable, research the organization with your state’s Attorney General, Better Business Bureau, and the local consumer protection agency. While you can’t ask individual clients for references for privacy reasons, you can see if anyone has filed a complaint against the organization. Compare this with the length of time the organization has been in business. Simply because there have been no complaints doesn’t necessarily mean the organization and counselors are problem-free (especially if they haven’t been in business long), but it is a good indicator.
7. What are your fees? Are there set-up and/or monthly fees?
Since you are presumably trying to get out of debt or clear your credit history, you don’t want to dig yourself into a deeper hole by committing to expensive services that may put you deeper in debt. It’s important to get a full price quote on paper and make sure all of the extra fees are included in the price quote. If the services are more expensive than you can afford, ask if the organization can offer you a special rate because of your situation. You might consider looking for an organization that will help you regardless of your ability to pay for the services.
8. How are your employees paid? Are the employees or the organization paid more if I sign up for certain services, pay a fee, or make a contribution to your organization?
Credit and debt counselors who are paid a commission for getting you to sign up for certain programs are incented to bring on new business. As such, they may have their best interests in mind when choosing a debt program for you. Ask the credit counselors if they are paid a commission for your signing up to debt classes/courses or if you sign up to a Debt Management Program. Keep this information in the back of your mind when reviewing your options.
9. What do you do to keep personal information about your clients (for example, name, address, phone number, and financial information) confidential and secure?
Your financial and personal data should be kept under the tightest security possible. Because credit counselors and debt counseling organizations are charged with handling all of your sensitive personal and financial information, they should have safeguards in place to protect it. Make sure the organization has adequate safeguards in place before you turn over your personal information.
Source of Questions: Federal Trade Commission