If you have at least $5,000 in unsecured debt, a consumer credit counselor can help you make sense of your finances and get your debt under control.
There are non-profit and for-profit counseling agencies. As a general rule, a non-profit agency is your best bet because it doesn’t earn revenue through fees. Instead, these types of agencies receive grants, and that eliminates the pressure to try and get as much money as possible from you.
As a result, non-profit agencies only charge for the essentials. However, the Federal Trade Commission warns consumers to thoroughly research these agencies as well, since there is always the possibility that an organization might not be legitimate.
To help your counseling session progress as smoothly as possible, you need to have the following information on hand: current pay stubs or proof of income, your latest credit card statements, and a list of monthly expenses (housing, transportation, food, utilities, etc.).
ClearPoint Credit Counseling Solutions
ClearPoint is one of the best – and one of the most popular – credit counselors. It is a 501(c)(3) nonprofit agency. You can meet with a counselor in person, over the phone, or online. A counseling session typically lasts around 60 minutes. Nighttime and weekend sessions can be accommodated. Counselors review your financial situation, and help you develop a budget and action plan. The agency does not charge any fees for this consultation.
After the consultation, if you decide to enroll in the debt management program, there is a start-up fee that won’t exceed $75, and the monthly fee will not exceed $50. ClearPoint takes a rigorous approach to debt management. Participants are required to close their credit card accounts – and the agency doesn’t just take your word for it. You may be required to cut up the credit cards in the presence of your counselor. Also, you can’t open new credit card accounts. The agency works with your creditors to lower your interest rate, waive credit card fees, and reach a monthly payment amount that you can afford to pay. You send one agreed-upon monthly amount to ClearPoint, and the agency distributes the money to your various creditors.
In addition to credit counseling and a debt management program, ClearPoint also offers bankruptcy credit counseling and certificates, and housing programs. The agency’s website has a wealth of financial tools to help you learn more about credit, debt, and other personal finance topics.
ClearPoint is licensed in all 50 states. It is accredited by the National Foundation for Credit Counseling and has an A+ rating from the Better Business Bureau.
InCharge Debt Solutions
InCharge Debt Solutions is a 501(c)(3) nonprofit agency that ranks very highly in several categories. It is one of the most cost-conscious agencies. Credit counseling is free, and if you decide to enroll in the debt management program, the setup fee will not exceed $40, and the monthly fee will not exceed $25. Depending on your income, your fees might be waved. The company will work with your creditors to lower your interest rates, erase credit card fees, agree on a monthly amount that you can afford, and stop calls from debt collectors. Your bills will be consolidated into one monthly payment.
InCharge Debt Solutions accommodates various schedules. In addition to weekend and night counseling in person or by phone, you can take advantage of online counseling.
The agency also offers student loan counseling for people who have trouble paying off this debt. In addition to debt management, it also offers debt consolidation, bankruptcy counseling, and housing counseling. The financial literacy library has a variety of presentations, articles, workbooks, and calculators to help consumers.
Licensed in all 50 states, InCharge Debt Solutions is accredited by the National Foundation for Credit Counseling and has an A+ rating from the Better Business Bureau.
Additional National Credit Counselors
To avoid being repetitive, below are two other top national credit counselors that provide comparable quality and similar services:
American Consumer Credit Counseling – excellent consultation and extensive library. Also includes debt management, credit counseling, student loan counseling, and bankruptcy counseling.
Take Charge America – also includes debt help, student loan counseling, and housing counseling.
Other Options
While this article reviewed some of the top national consumer credit counselors, there may be excellent counselors in your local area. For example, some colleges and universities offer this service, in addition to housing authorities and even credit unions. Your state consumer protection office can also provide a list of local credit counseling organizations.
Avoiding Scam Counselors
Before deciding on a credit counselor, make a checklist of questions to ask. The answers to these questions can help you find the right agency. For example:
- Are you licensed to operate in my state? If the answer is “no,” that’s a red flag and you should move on to the next organization on your list.
- Do you offer a variety of services? Ideally, the organization should offer more than just counseling and a debt management plan. For example, it should also offer budgeting advice, and tips on ways to save And, the information should be free.
- What types of fees do you charge? All of this information should be given to you in writing. Also, any verbal promises or details should match what is given to you in writing. If not, don’t sign the agreement.
- Are your counselors certified or accredited? Ideally, they would be trained by a third-party.