How To Avoid Credit Counseling Scams

When some of us are going through a hard time in our life, there are always others who will try and prey on us. Unfortunately being in debt is no different. There are many out there who will claim they can help you and help to sort out your debt for you and you are so vulnerable at this time you want to believe them. Before hiring a credit counseling service, however, keep in mind the following are simple credit counseling scams you should avoid:

Fees: many credit counseling service companies like to take fees from both ends – both from you and from your creditors. They can do this by charge you a fee for counseling you and making repayments on your behalf. They can charge fees to your creditors as part of a success fee arrangement for getting you to repay the debt. As such, before you agree to hire any credit rating agency, always check:

1. if there will be a start-up fee;
2. if there will be any administration fees; and
3. if they are also going to be paid fees from your creditors. If the answer to any one or more of these is yes, give careful thought to whether the agency is acting in your best interests or in their best interest!

Reputation: in the world of credit counseling some agencies have a better reputation than others. Indeed, you may well find that there are certain agencies who your creditors (credit card companies, etc.) will not deal with. So, before you hire any credit counselor to act for you, check with your creditors to see if this agency is going to be acceptable to them. Always keep in mind that your creditors deal with credit counseling agencies on a daily basis, so use their expertise wisely.
Agreement: any agreement that you make that is not in writing is not worth the paper it’s not written down on! If you make an agreement with a credit counseling agency, make sure you have it set down clearly on paper beforehand exactly what is expected of you and what service is being offered to you!
While it is understandable that you want to break your cycle of debt, and commendable that you are seeking the help of a professional to do this, don’t become a victim to your desire to get out of debt, make sure that you undertake a thorough check on your credit counseling agency to ensure that they stack-up and are reputable!