Knowing who to trust can make all the difference when you're in a financial crisis. And if you're in debt and looking for help, finding a certified credit counseling agency in your community is the best place to start.
With so many predatory companies vying for your attention, knowing what a certified credit counseling agency is (and how it works) is your best defense against making the wrong choice. Here’s how to find a trustworthy credit counseling agency—and what to avoid.
Start With Trusted Resources
When it comes to finding a certified credit counseling agency, the National Foundation for Credit Counseling (NFCC) and the Financial Counseling Association of America (FCAA) are your most reliable starting points. Both offer easy-to-use directories of accredited agencies right in your community.
Check Those Credentials
You’ll also want to find evidence that an agency is backed by one of the above trusted resources. Check the organization’s website to ensure that it’s been certified by the NFCC or FCAA, which serve as industry standards for accreditation. Reputable credit counseling agencies should also be 501(c)(3) nonprofits, a disclosure you can typically find at the bottom of an organization’s homepage. Finally, being a member of a site like the Better Business Bureau (BBB) shows they’re committed to a standard of transparency and best practices.
What’s The Organization’s Reputation?
Reviews are an important part of the process when you’re looking to do business with a company or organization. Visit sites like the BBB, TrustPilot, and even Reddit to see what other people are saying.
Are There Charges?
Reputable, certified nonprofit credit agencies are required to provide budget help, counseling, and financial education at no cost. While other services like a debt management plan (DMP) may cost a small monthly fee, around $40–$50, if price is a barrier, they may waive it.
Know What to Avoid
There are two types of companies that may seem like a solution, but the risks often outweigh the potential benefits: debt consolidation and debt settlement companies. Before pursuing either, it's important to understand what you're signing up for. Debt consolidation can be helpful, but approval isn't guaranteed, and if your credit is already suffering, high interest rates may cost you more over time. Debt settlement companies are for-profit and typically advise you to stop paying your debts altogether during negotiation, typically charge 15%–20% of your settled debt, and offer no guarantee your lenders will agree to settle potentially leaving you worse off than when you started. But by following these tips, you’ll find a credit counseling agency that can help you on your path to financial stability.