When you find yourself thinking about using a credit counseling service, you need to be very
careful. You need someone who will help you, not just some pushy sales associate who wants
only to sign you up for their service.
You are about to place your financial life in someone elseís hands. Make sure you have the
answers to some questions before you do. Then make sure you like the answers to your questions.
Here are some for starters:
Which of my creditors have you worked with in the past?
You have a list of your creditors. You want to compare it to the creditors they have worked
with in the past. Have they been successful working with your creditors in reducing payments,
lowering interest, and eliminating fees?
You need to know not all creditors will work with credit counselors. If all, or most, of your
creditors have, or will, you should investigate these services further. If not, credit counseling
wonít do you much good. To protect yourself, ask for a list (in writing) of any of your
creditors they have worked with in the past.
Will my creditors be paid on time each month?
Two things come into play here. What are the due dates of each creditor and when during the
month do you get paid? Nothing defeats the purpose faster than paying a creditor late, after
you have set up a new payment schedule.
Some credit counseling services use a set date each month to make payments from the money
you have given them. If they donít have your creditors change the due date you could be
socked with late fees each month. Find a service that adjusts the due dates of your bills to
work around the days you get paid.
How do I pay you each month?
The credit counselor canít pay your creditors until you pay them each month. Will they
remove money, each month, from your account with an electronic transfer or are you
required to send them a guaranteed check or money order? You want to make it as easy as
possible for this plan to work. Look for a service that will withdraw funds from your
account automatically each month.
When and how often will I get statements of my accounts?
Just because you have turned over a portion of your financial life to someone else to run,
does not mean you donít need to keep track of what is going on. Your statements should
break down your payments so you can see where the money is going. How much is going to
interest, how much to the principal balances, and how much is being paid to the credit
Who can I call?
When you have a problem or question can you speak with someone on the phone? Are you
able to speak to the same counselor each time? If not, how long do you take to returns
Do this up front. Make sure you can live with the answers you receive. Then test the service
to see if they live up to what they have said. Check their service out before you sign on the
bottom line. If you find that you canít get questions answered or telephone calls returned
look for another service. Going through credit counseling is stressful enough without any
These questions will give you a good idea what kind of service you have found. There are other
questions you may ask. If you think of any do not hesitate to ask and donít stop asking until you
get the answers you need. It is your money.
David Wilding works with both individuals and groups to help them rid their lives of debt. For the past ten years he has attempted to change attitudes toward and acceptance of personal debt. Visit his website http://www.debtattack.com for more ideas, tools, and strategies to become debt free.