Having Credit Problems? There are Free Credit Counseling Services That May Help You
Last Updated: July 12, 2011
You have probably seen the ads on TV and in newspapers - "Credit Problems? No Problem" or "We Can Remove Bankruptcies, Judgments, and Liens from Your Credit Report - Quick and Easy". Unfortunately, nothing is "quick and easy" when it comes to repairing your credit and these exaggerated claims are way too good to be true.
Everyday, these credit repair companies target those with poor credit making grand claims of cleaning up their credit so they can get a car loan, credit card, or home mortgage. It is best if you try to repair your credit on your own, but if you can't resolve your credit problems yourself or you need additional help, you may want to contact a credit counseling service.
Brief History of Credit Counseling
The first credit counseling agengies were organized in 1951 when credit card companies created The National Foundation for Credit Counseling (NFCC). With the overwhelming growth of consumer debt, two more organizations were formed to control the credit counseling industury - the "Association of Independent Consumer Credit Counseling Agencies" and the "American Assocation of Debt Management Organizations".
Not all credit counseling agengies belong to one of those organization, and they don't have to be to do business. So, not all credit counseling agencies claiming to be "legitimate" really are so it is very important to make sure the company you are going use is a member of one those organizations. Today there are over 1,000 legitimate credit counseling agencies helping consumers get out of debt.
What is Credit Counseling?
Credit counseling involves experts who work with consumers who are in debt, get out of debt. This is done through education, negotiation, and coming up with a debt management plan for the client to follow. If followed, this plan will help the consumer repay his/her debt by working out a repayment plan with the creditors.
Types of Free Credit Counseling Agencies
Non-Profit - There are non-profit organizations in every state that counsel consumers in debt. Counselors try to arrange repayment plans that are acceptable to you and your creditors. They also can help you set up a realistic budget. These counseling services are offered at little or no cost to consumers. Non-profit counseling programs are sometimes operated by universities, military bases, credit unions, and housing authorities.
Low-Cost and Free Counseling - There are numberous organization that offer free or low-cost counseling to those consumers who qualify. You can also check with your local bank or consumer protection office to see if it has a list of reputable, low-cost financial counseling services available.
Some Tips to Finding Low-Cost and Free Credit Counseling
One way to find low-cost to free credit counseling is to search the internet. There are lots of listings so make sure to read all the find print before you sign up with one. We do have a few suggestions on organizations that offer credit counseling at little or no charge that you can check out:
- National Foundation for Credit Counseling is the nation's largest financial counseling organization. NFCC is a non-profit organization that provides free or low-cost individualized, confidential credit counseling by trained Certified Credit Counselors.
- The FTC offers advise on fixing your credit on your own and what to look for if you are going to use a credit counseling company. They give you tips on how to recognize a credit repair scam and what questions to ask when looking for one to use.
- Neighborhood Housing Services offers financial counseling at no fee. It does not offer debt consolidation loans, and has offices in every city in the country.
- HUD.gov lists approved counseling agencies that help homeowners in financial trouble.
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