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What to Look for in a Credit Counselling Agency

By Debt.ca on October 26, 2020 No Comments
Interviewing credit counsellor

Do you know what to look for in a credit counselling agency? Do you struggle in planning a realistic budget, handling your finances, or paying off your debts? If your answer is yes, then it’s time that you look for help. Working with a credit counselling agency helps when it comes to important financial matters. Especially money management and solving your debt problems.

A credit counsellor reviews your financial situation and can give you professional advice. With help, you can learn how to overcome your most pressing financial challenges. Knowing how to choose a credit counselling agency because there are ones that don’t deliver what their marketing promises.

Financial experts and trusted credit advisors have their say on what are the things you should look for in a credit counselling agency. Read this guide to learn more about this topic.

What is the Work of a Credit Counsellor?

If you opt for credit counselling, your credit counsellor can give you advice in person, online, or via phone call. You will get interviewed for about 30 minutes to 1 hour concerning your financial circumstances. Your credit counsellor will inquire about your income, assets, budget, and expenses. Be sure to get the necessary documents when you start the counselling process.

Since you’re here to solve your financial issues, you will also get asked about the root causes of your money or debt problems. Then, the information gathered regarding your monthly cash flow and assets you own is crucial because it could be used in creating a strategy to overcome your financial troubles.

One of the duties of a certified credit counsellor is to help you figure out various debt repayment strategies to get rid of your debts and start a debt-free life. Credit counsellors have expertise in data assessment, and they are trained to educate clients on the various solutions and debt management programs to help pay off their debts.

The programs or solutions that your counsellor recommends will be tailored to your financial situation so that it won’t be hard for you to execute them.

Preparing for Credit Counselling

Make sure to prepare the necessary documents and gather all the information relevant to the credit counselling process. A few days before the schedule, prepare the paperwork to avoid any delays or problems.

Here are the things that your credit counsellor will ask you during the counselling process. Get yourself prepared to answer them and back your answers with documentary proof.

  • Your credit counsellor will ask you about your income. As such, make sure that you bring your latest paycheck that shows your total income (gross and net income) and the amount withheld. If you have multiple sources of income, you should prepare the last paycheck you’ve received for each of them.
  • Current Debt. If you’re currently paying for a car loan, student loan, or home loan, make sure that you prepare a list of such debts including their loan terms and interest rates.
  • Relevant Information on Your Credit Card. Gather the important details about your credit card/s including the interest rates, current balances, and payment due dates.
  • Monthly Expenses. You’ll also be asked by your counsellor about your monthly expenses, such as the amount you spend on gas, phone, internet, groceries, subscription services, and utility bills. Make sure to list them down before your scheduled credit counselling.

The Difference Between For-Profit and Nonprofit Credit Counselling

Experts suggest that you work with a reputable credit counselling agency. For you to save money, it’s also advisable to choose a nonprofit credit counselling agency that offers its service at a minimal fee.

Nonprofit credit counselling agencies follow stringent rules to ensure that they provide the best service for their clients. Many of them are also accredited by relevant governing bodies and audited by the states where they operate.

For-profit credit counselling organizations, on the other hand, typically impose service fees that are more than the amount charged by nonprofit agencies. Basically, they are selling the services they offer, and counsellors in these for-profit counselling organizations also get bonuses if they attract a specific number of people to participate in their programs.

What to Look for in a Credit Counselling Agency – Choosing the Right One

Looking for a trusted credit counselling agency is a serious matter. You must figure out your needs beforehand. Then, you can ask for recommendations from the people you know or do your research on the internet. Make sure to consider the agency’s track record, best practices, and clients’ reviews.

As you search for credit counselling agencies, don’t forget to ask some questions and evaluate their answers to filter the best one that suits your needs. Consider these questions below for that purpose.

  • Does the organization have an accreditation and state license?
  • Do the counsellors under the credit counselling agency receive commission fees?
  • Are the counsellors certified to provide counselling services?
  • Does the credit counselling agency provide financial education workshops?
  • What are the consequences if you miss a payment or can’t afford the service charges?
  • Are there any complaints against the organization? Check the Better Business Bureau or inquire with your state attorney general for such information.

When Should One Work with a  Credit Counselling Agency?

For people who are saddled with debts, credit counselling is a good option to take. However, getting expert advice from a counsellor isn’t only for those who have debt problems. You can also take this approach if you want to learn how to create a practical budget, set your finances straight, improve your credit score, etc.

Participating in credit counselling can also help you understand various solutions if you find yourself falling behind your debt obligations. For instance, you’ll learn debt relief, debt consolidation, and debt settlement options for you to overcome your debts.

Takeaway

It’s a must that you know what to look for in a credit counselling agency before you decide to pick one. Choose a nonprofit agency with a state license and accreditation. You can consult debt.ca if you’re searching for a credit counselling organization to help you manage your finances and solve your debt problems.

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