Choosing A Credit Counseling Agency – All You Need To Know

Many people struggle with high debt balances, and this has only been more of a challenge with the COVID-19 pandemic. Individuals and families around the country are drowning in debt and struggling to find a way out. As a result, many are turning to professional agencies with experience in helping people to manage and reduce their debt. These agencies, known as credit counseling agencies, provide services to individuals with high levels of debt. But with many options out there and the possibility of encountering fraudulent credit counseling organizations, it is important to find a reliable option. Continue reading for a guide on all you need to know about choosing a credit counseling agency.

UNDERSTANDING CREDIT COUNSELING AGENCIES

Let us start first by reviewing what credit counseling agencies do. As the name implies, credit counseling agencies provide counseling services to those with poor credit – that is, individuals with many outstanding bills and high credit card balances. These individuals typically must face credit collection agencies, and the burden of debt can be extremely overwhelming. The role of a credit counseling agency is to help individuals to better manage their financial situations and figure out doable payments plan to get their debts under control.

THE ROLE OF THE FEDERAL TRADE COMMISSION (FTC)

When it comes to monitoring credit counseling agencies, the Federal Trade Commission (FTC) plays an important role. The FTC provides guidance to individuals who are looking for a credit counseling agency to help manage their debt. While it is an unfortunate reality, there are several fraudulent organizations out there that prey upon people in debt by posing as credit counseling agencies. The FTC has set guidelines that should help people looking for a reputable credit collection agency.

GUIDELINES ON CHOOSING THE RIGHT AGENCY

So, what exactly are the FTC’s guidelines? Here are some pointers to help you narrow down your options and find the right credit collection agency for you:

  • Select an agency that provides a range of services, not just debt management
  • Check that the agency is properly accredited / licensed
  • Investigate the agency’s funding sources / auditors for potential conflicts of interest
  • Choose an agency that charges a percentage on your savings rather than flat fees, and be sure to obtain a signed agreement
  • Be sure the agency complies with consumer support acts, and safeguard your personal and financial information

This list is by no means exhaustive, but it should provide a solid framework for you to begin to narrow down your credit counseling agency options. When in doubt, you can always get in touch with a consumer protection agency near you to vet your potential options.

CONCLUSION

Overall, if you are in debt, the most important thing to recognize first is that you are not alone by any stretch of the imagination. Many people just like you are struggling every day. The key thing to remember is that there is always a way out. Just make sure that if you seek the services of a credit counseling agency, do your research beforehand to ensure that you receive legitimate and sound advice.

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