Working with a Certified Credit Counselor
A Certified Credit Counselor Helps You Find Debt Relief
When you need debt relief, it’s important that you deal with an organization run by professional, specialized team members who really know their business. That’s why when you call InCharge Debt Solutions, you’re not just connected to a credit counselor. You speak with a certified credit counselor who is trained to answer your questions, explain how our organization works, and provide you with personalized debt relief solutions. Our counselors are certified by the NFCC: National Foundation for Credit Counseling. They’ve received the industry’s best training and education.
How to Choose a Credit Counselor
Friends and relatives should be the most reliable place to look for help in choosing a credit counselor.
However, if you don’t know anyone who has used credit counseling services, the best recommendation is to find credit counselors who work for nonprofit organizations. These agencies provide free advice over the phone, online or in person.
There are a variety of places to find them, but it’s a good idea to limit your search to nonprofit agencies certified by the National Federation on Credit Counseling (NFCC) and recommended on its website.
The NFCC, whose mission is to promote financially responsible consumer behavior, is the largest and longest-serving nonprofit financial counseling organization in the U.S. Its member agencies and employees are certified every four years by the Council of Accreditation to ensure they deliver the highest level of financial education and counseling services.
It’s important to research credit counseling agencies before selecting one. You should find as many as a half dozen counseling agencies whose credentials you plan to evaluate. See what they’ve posted online, and ask them to send you free information. Don’t tell them about yourself at this point, and if the counselor presses you for personal information, consider it a problem and eliminate them from consideration.
Next, vet the counselors you’re considering. Check with your state’s Attorney General and with local consumer protection agencies to learn if complaints have been filed against any of the counselors under consideration.
If you are considering bankruptcy, the U.S. Trustee Program keeps a list of approved pre-bankruptcy counselors, and you should compare your candidates to the list.
Questions to Ask Credit Counselors
If you are considering several agencies for credit counseling, there are some things you would want to know before deciding on the right one to help with your situation.
Here are some questions you should ask before agreeing to move ahead:
- Can you provide counseling materials free of charge?
- What do you charge, if anything, for your services?
- Are you licensed to provide services and do you have accreditations?
- What are your other qualifications and how long have you worked in the field?
- Will information about me remain confidential?
It’s important to remember that nonprofit status is no guarantee that the agency’s counseling is free, affordable or even reputable. Know what to expect from a credit counseling agency and vet them until you find the one that will meet your needs.
What Is an Accredited Credit Counselor?
An accredited credit counselor has received training and certification from either the National Federation of Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).
The NFCC and FCAA are national financial counseling organizations that certify the credit counselors at member agencies are qualified to offer financial education and advice to consumers with debt problems.
When choosing a credit counselor, ask them about their affiliations and certifications and whether they belong to either the NFCC or FCAA.
The NFCC, founded in 1951, was formed to promote awareness of credit and financial literacy. It gave rise to a national network of independent nonprofit credit counselors. The NFCC conferred certifications on its member agencies and provides education material as well as public relations services.
The FCAA was launched in 1993. Though similar to the NFCC, it has emphasized technologies like the internet that helped its members reach a broader audience.
The National Association of Certified Credit Counselors (NACCC) works with both credit counseling organizations, providing training, testing and certification to credit counselors. It partners with the Financial Counseling Network and the Center for Financial Literacy.
How Does Credit Counseling Work?
Credit counseling is an educational process that examines how clients got into debt, how they might get out of it and how they can avoid repeating the problem.
Most credit counselors will start the process with a free consultation to assess your financial status. The counselor will ask you questions about how much money you earn, how you spend it and whether you operate from a budget. You will also be asked about your debt obligations. The process usually takes place over the phone or online, but can happen in person at an agency office and takes about 30 minutes.
After reviewing your situation, the counselor will suggest solutions to pay off your debts. They might include a system for paying off debt through a debt management program, a debt consolidation loan, a debt settlement or, in dire cases, bankruptcy.
The counselor reviews the positives and negatives from each plan and estimates how long each solution might take.
Online Credit Counseling vs. Speaking To A Credit Counselor
At InCharge, you have a choice between receiving credit counseling online, where you enter information about your income, assets and debts, or speaking to a certified credit counselor over the phone. The information that you share, the time comittment and advice you receive will be the same.
Will Seeing a Credit Counselor Impact My Credit Score?
No! Nonprofit credit counselors offer free financial advice. Since they are only advising, your conversation has no impact on your credit score, which is a numerical assessment of your creditworthiness.
Keep in mind, though, that credit counseling often leads to a debt management plan, which can become part of your credit report and thus, a part of your credit score. A debt management plan often involves closing credit card accounts and merging them into a single monthly, managed payment. These plans can take 3-5 years to complete and could have a slight impact on your credit rating.
If the credit counselor recommends either debt settlement or bankruptcy, both will have a significant long term (7-10 years) impact on your credit score.
The bottom line: Talking to a credit counselor doesn’t have direct consequences that affect your credit score. Entering any of the solution programs could negatively impact your score.