Consumer Credit Council Agencies: The Essential Guide

2007-03-08 10:33:40

( Financial )



Consumer credit council agencies claim to be the answer to your debt troubles. But is this claim substantiated? Or are you being misled into an agreement that will only benefit their bottom-line? Read on and find some answers.

What Consumer Credit Council Agencies Are Expected To Do

Consumer credit council agencies are ideally nonprofit oriented firms that help people suffering from serious debt problems. They provide consumer debt counseling and training on handling money. They also help you create a feasible budget that will provide for your monthly needs as well as allot monthly payments to your creditors. They present a win-win solution for you and your creditors by arranging a plan that will allow you to repay your creditors in a reasonable time frame while increasing your creditors’ chances of recovering their money. In short, the right consumer counciling agency can indeed do wonders to your credit woes.


Choosing The Right Consumer Credit Council Agency

Of course the key to successful debt reduction is a great counseling agency to partner with. But how do you sort through the multitude of companies and find the right one? First, check a company’s credentials. Verify their licenses with your state Attorney General. Check if they have accreditation from reputable consumer groups and if they are members of a trade association. It helps if you know someone who already has experience dealing with the companies so you can ask them if they are worth giving a try. If you don’t know any, then check out internet sites that give independent reviews on these agencies.


What You Need To Avoid

While claiming to be nonprofit, many consumer credit council agencies do charge fees. A reputable one may usually charge relatively low fees, owing to the fact that they get contributions from your creditors who choose to cooperate with them. But some underhanded firms ask for upfront fees or maintenance charges. Some may not even tell you that they are deducting donations from your monthly payments. To avoid this ask for assurance that 100% of your contributions directly go to your creditors and that whatever fees they need to charge you must be explained in detail. Also, some may insist on enrolling you in a debt management program that may not at all be needed for your situation. Before you sign up for this kind of program, ask them why they think you need it and whether you’ll actually benefit from being under such a program.

The potential benefits of working with a consumer credit council agency are substantial. But you need to be careful in choosing a firm to partner with, as there are a lot of illegitimate operators out to victimize unwitting customers. As always, choose wisely!


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