Should You Use Credit Counseling to Repair Bad Credit?

Bad credit is a growing problem.  More and more people everyday have to face their credit problems.  There are many people who don’t want to face them alone, so they turn to credit repair services.  A popular service for people to use is credit counseling.  Not all credit counseling companies are the same.  There are plenty of companies that are just out to get your money.  Some of them even claim to be non-profit.  Of course, not every credit counseling services is bad.  You just have to know the difference.  Here are some things you should consider before you pay a dime to a credit counselor.

The first thing you should look for is their offer.  If they promise you anything that seems unrealistic, you should be wary.  The majority of the time if an offer sounds too good to be true, it usually is.  Anyone who tells you that it will take no time to repair your credit is lying.  It takes a while to see results from any credit repair action you take, so don’t fall into that trap.  They should also make you aware that using a credit counseling service does go on your credit report, and it’s not a great mark to have.  Don’t let them convince you otherwise.

Any counseling service that is reputable will be accredited by the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.  Make sure they can prove this information before you sign up.  You might also want to check with the Better Business Bureau to see if they have an unusual number of complaints, especially if the complaints are unresolved.  You should find out about their business practices as well.  You want them to use legal and ethical ways to repair your credit. 

After you think you’ve found a good credit counseling service, you’ll want to find out everything you can about them.  You should understand the services they can offer you, as well as what kind of support they offer.  You may want to find out if they offer any additional services like educational programs.  Make sure you understand exactly how much you’ll be paying, and what you get for that price.  They should be upfront about any fees they charge.

Before you make your decision, you might want to know if they assign specific counselors to cases.  This may not be an issue for you, but if you like working with the same person each time, it’s something you’ll want to consider.  It can be hard to get the information you need or even ask questions if you’re constantly passed from person to person.  So find out beforehand how they’ll handle your case.

Any company you choose should provide you with monthly statements.  If they don’t offer this, you need to find a company that will.  The monthly statements will help you keep track of what’s being done and when.  Each statement should include the amount you’ve paid, how much was sent to each creditor, and the dates the amounts were paid.  Make sure to carefully read your statements when you receive them.  This way you can be sure the company is following your agreement.  It will also help you to notice any mistakes and get them corrected quickly.

It may seem like a lot of work to find a good credit counseling company, but it’s worth your effort.  You want to make sure that the money you have to pay them is put to good use.  The last thing you want is to be out more money and have your credit get worse.  So take the time to do your research on each company, and you’ll get the help that you need to repair your credit.