Credit unions, military bases, and universities operate credit counseling services that can help you manage your debts and improve your credit score. Not all financial counseling organizations labeled as not profit credit counselors are actually helping consumers. There are some, which may be out to get money from desperate consumers. The consumers struggling with below-stellar credit scores should learn that they might not be able to change those scores within a few months.
It may take a couple of years to get back to the levels of 750 points and above. Most of the credit counseling agencies, which are promoting their services as nonprofit organizations, are using that status to evade consumer protection laws or take advantage of trustful unsuspecting consumers. Some agencies are more interesting in luring their clients to consider debt management plans DMPs, which are quite lucrative and could leave the consumers more hurt in their finances.
And, as a legislative director for the Consumer Federation of America, Travis Plunkett said, while a non-profit status suggests that a credit counselor has the best interest of a consumer at heart, that is not always the case. Plunkett further pointed out that there are some very good credit-counseling agencies, but on the other hand, there are some very bad ones, and non-profit status has nothing to do with it.
Credit unions, military family service centers, and Cooperative Extension offices can offer free or low cost debt counseling services. The local nonprofit agencies, which offer educational programs in debt management and development of debt payments plans, operate under the Consumer Credit Counseling Service (CCCS).
Any agency you deal with should not charge exorbitant fees, which puts more pressure on your financial burden. The agency should be accredited by the Council on Accreditation- COA or the IOS standardization body. In addition, the counselor should be certified and approved by the National Foundation for Credit Counseling- NFCC. This is an organization, which supports the national network of credit counselors.
The agency you deal with should be more interested in educating and offering support on how you can manage your debts now and in future. It should educate you properly on how you are able to deal with a debt and not just suggesting a debt management plan. Where a debt management comes in, there may be some money to pay.
However, you should be careful with the debt management plans where the agency offers to make payments for your debt and bills on your behalf. When you consider debt management plans, you should make sure that the fees are minimal and not exorbitant. A set up fee, typically a few dollars, is required but where there are large upfront fees, you should keep off. The Better Business Bureau may provide important information about these debt counselors.
If you discover that the so labeled nonprofit debt counseling organizations are attracting bad comments on the Better Business Bureau, you should refrain from dealing with those kinds of organizations. The local consumer protection agency can also provide information about approved and reputable debt counseling organizations. In case you have doubts about any approved credit counseling agency, you should not hesitate to contact the US Trustee Program
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