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How To Choose The Right Credit Counsellor For You

By Debt.ca on December 11, 2020 No Comments
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Credit counselling is one of the ways to solve your debt and other financial problems. If you choose the right credit counsellor, he or she can help you identify the root of your debt problem. It also helps you learn about the different solutions to get out of your predicament. Your counsellor also helps you manage your budget and reach your financial goals.

For those people who are struggling with debt, credit counselling is your go-to solution. Here’s a guide on how credit counselling works and how to choose the best credit counsellor for you and your financial situation.

How Credit Counselling Works

Credit counsellors have undergone training and hold certificates that prove they are legit in their roles. When they conduct a counselling session, the procedure only takes 30 minutes to 1 hour, and it’s typically done in person or through phone calls or video conferences.

During the credit counselling session, your counsellor will evaluate your income and regular expenditures to help you craft a viable budget plan. He/she will also check your credit report and credit score to get an idea of your finances’ situation.

Knowing your income, expenses, and overall financial circumstances help your counsellor find a solution on how you can lessen or eliminate your debt. In most cases, an effective budget strategy and self-discipline to stick to a recommended spending limit can help improve your financial lot.

However, some cases require solutions beyond effective budgeting. For example, your counsellor will suggest to you a debt management program. It’s a debt relief solution that allows your counsellor to discuss your debt with your creditors. The purpose is to lessen your loans or credit cards’ interest rates and create an affordable monthly payment.

If you’re not qualified for a debt management plan, you can go for a debt settlement, a consolidation loan, or bankruptcy. You have to ensure that your credit counsellor explains the advantages and disadvantages of each option before you sign up for one.

Choosing a Credit Counselling Agency

Choosing a credit counselling agency can be difficult if you don’t know how to find one. Make sure to pick a reputable credit counselling agency and avoid scammers that disguise themselves as credit counsellors. You can choose the right credit counsellor for you from there.

Don’t forget to field relevant questions to the credit counselling agency. You should see to it that you’re comfortable with their answers before signing up for their service. Keep in mind that a legit agency will have your financial situation as its top priority, not just for making money. After all, most agencies offer free counselling.

Yes, that’s one advantage of credit counselling: getting free services. Make sure to look for a reputable non-profit credit counselling agency for that purpose. As far as possible, don’t sign up to counselling organizations that are for-profit because – obviously – their interest is to make money.

A non-profit credit counselling agency is more focused on providing a service to people who are struggling financially. Its main purpose is to help you find a solution to eliminate your high-interest loans or credit card debts and maintain stable finances. It will provide you with free literature and counselling sessions for that purpose.

If the credit counselling organization tries to convince you to shell out money for counselling sessions, most probably it’s not a legit “non-profit” credit counselling agency. You better check the Canada Better Business Bureau to ensure the legitimacy of the agency.

Questions You Must Ask to the Credit Counselling Agency

As mentioned previously, you must ask the credit counselling agency a series of relevant questions to test their credibility and ensure that you’re comfortable working with them. Here’s a list of recommended questions that you should ask them.

Does the credit counselling agency have an affiliation with a national association like Credit Counselling Canada?

The agency must be affiliated with the CCC because it ensures that its member agencies follow standards for conducting credit counselling. The CCC reviews a member agency annually to ensure that they comply, and it also requires annual audits by a third-party CPA.

Does the agency have accreditation from an independent accrediting organization?

Make sure that the credit counselling organization is accredited by a trustworthy third party. It’s to ensure that the agency puts importance on the principle of checks and balances.

Is the credit counsellor helping you be certified?

Of course, the credit counsellor helping you with your financial situation must have the certification and necessary training to carry out his/her job. The CCC requires credit counselling organizations that their counsellors have attained the designation of Accredited Financial Counsellor Canada®. Your counsellor should also follow the strict ethical standards of credit counselling to ensure that he/she doesn’t breach any of your rights.

What are the services that the credit counselling organization offers?

One good sign that the agency is legit when it offers multiple services related to credit counselling. For instance, it must offer services like seminars on budget planning and financial literacy and educating people on how to solve their debt problems.

What are the fees and how much?

The credit counselling agency must disclose to you their service fees if there are any. While non-profit credit counselling organizations offer free counselling appointments, they typically charge clients for other services. You must understand the fee structure of the agency before signing up.

What are the debt relief solutions that the agency offers?

Given that every individual’s financial situation is different, your agency should recommend a solution that suits your financial circumstances. Agencies commonly offer people in debt the following options: debt settlement, debt management program, debt consolidation loan, or bankruptcy.

Does the agency conduct financial workshops and educational seminars?

Aside from counselling sessions, there should also be seminars and workshops on making your finances more stable. If the agency doesn’t provide such, it’s time that you look for another one.

Takeaway

It’s an excellent idea to hire the services of a credit counselling agency when you’re saddled with debts. But, of course, you should know how to choose the right credit counsellor for you and your financial situation. Call us today for more information.

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