Are credit counseling services financial lifesavers? Or is it a complete waste of time and money? The answer is, it depends.
There are legitimate companies through which you can find help and support.
And there are also scammers ready to take advantage of anyone's gullibility.
So the answer will heavily depend on you.
You need to choose the right agency to help you save your finances.
Here's how: First, know at least the basics of credit counseling and how agencies operate.
They'll most likely need you to provide financial information including your income, expenses and debts.
The counselor will use your personal data when making recommendations and addressing your financial problems.
Depending on your situation, you may be asked to enroll in a debt-management plan or be referred to another organization that addresses non-financial situations you are experiencing (mostly in the case of gambling and alcoholism).
Second, carefully choose an agency.
Spend some time researching credit counseling agencies and weighing your options.
Not all agencies are equal so make sure you choose a reputable agency that is known for satisfying its clients.
You can tell how well an agency performs by the number of clients who had successfully managed their debts.
Past clients frequently refer to agencies who have assisted them during the process so watch out for referrals.
The agency must also be licensed and accredited.
This only shows that the agency adhere to a strict standards of professionalism and accreditation and only hire certified credit counselors to deal with clients.
Third, ask for a personalized services.
Most agencies approach clients on a case-to-case basis.
Plans are basically tailored to suit your personal circumstances, thereby ensuring that you get the services your situation calls for.
If necessary, counselors must direct you to other appropriate services the agency offers.
Fourth, determine if you need to enroll in a debt management plan.
Agencies can set an arrangement that allows you to repay unsecured debts at reduced rates or at least without late fees.
Rather than paying to various creditors, agencies would allow you to send them your regular monthly payment.
This arrangement may cost you a modest fee although there are some that charge significant fees.
If the fee is too high, you always have the right to look for another agency.