If you’ve been browsing the Advantage CCS website, you might have noticed that we offer many tips to help you manage your finances and a lot of great advice about credit counseling and debt management.
But if you’re like many of our potential clients, you probably have questions about the credit counseling process or what happens during a credit counseling session. Popular questions include, “How can I tell if I need credit counseling?” and “What companies offer reputable credit counseling services?” We hope we can answer all of your questions about credit counseling with this in-depth blog post.
How can I tell if I need credit counseling? –
There are several clear warning signs that indicate you might need credit counseling. For instance, your outstanding debts and spending habits exceed your income, and you don’t know what to do about it. This is one of the most common reasons for seeking credit counseling.
If you’re a recent college grad, find yourself financially severed from your parents (perhaps for the first time), and are making an entry-level salary, then you might be staggering under the weight of student loans — and possibly frivolous spending habits. This is a popular topic – in fact, the Washington Post runs a series on life as a new grad every year – and as Generation X continues to replace Baby Boomers in the workforce, there can only be more public discussion about the financial woes of the young adult set.
I lost my job! Can credit counseling help me? –
Life happens! Maybe you lost your high paying job, and have never quite made the same salary since. Perhaps you bought a new home on a subprime mortgage and you’re scrambling frantically to sell or foreclose. Maybe you or a close relative has fallen ill and you’re drowning in medical bills. Whatever your situation, you’re finding now that you don’t earn enough money to pay your bills or pay off your debts.
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You need to learn how to manage your money and your credit cards correctly now. It’s possible to begin adult life with no idea how to manage your income and debts, and it’s equally possible to begin adult life on solid financial footing only to experience a complete reversal in your financial fortunes at age 50. Sign up for a free credit counseling session with Advantage CCS if you find yourself in a precarious financial situation.
The bill collectors are already calling, or you’ve been informed that most of your accounts have been turned over to collections. Credit counseling can most definitely help you in this case.
If the above statement describes your situation more closely, you are already in deep financial trouble. You have had difficulty paying your bills for quite some time now and are truly beginning to reap the consequences of avoiding payment.
Can you help me with medical debt? –
Medical bills are one of the biggest hurdles for Americans today. A telephone survey of more than 1,000 low-to-middle income households demonstrated that 29 percent of individuals in debt had medical bills that contributed to that debt. Those households with medical debt carried an average debt load that was 46 percent higher than other households. And, millions of Americans are uninsured as it is. So if your medical bills are in collections, your problem is unfortunately common.
Don’t delay in signing up for Advantage CCS credit counseling sessions if your bills are already in collections. Our counseling staff can help you handle your debtors while you work out a debt management plan and learn ways to be able to pay your bills again. You have options now, too. Justin Harelik, a journalist for Bankrate.com, advises that people who have bills in collections have several options, including negotiating with debtors, filing for bankruptcy, and hiring legal help.
Who offers reputable credit counseling services? –
Liz Pulliam Weston is a regular contributor to MSN Money. She has done extensive research on what constitutes as reputable credit counseling agencies and what makes a credit counseling agency fraudulent. According to Weston, “Debt counseling has become a $7 billion industry, but not all the players are legitimate.” And that’s very unfortunate. The worst thing a so-called “helper” agency can do to someone who’s down and out is to kick him or her even harder!
The United States Federal Trade Commission (FTC) expressly states that credit counseling agencies engaging in fraud or trickery are in clear violation of the law. So, before you sign up for any credit counseling services, read the following article on the FTC’s website: https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor
A reputable credit counseling agency is an agency that bears accreditation. Advantage CCS is a member of the National Foundation for Credit Counseling (NFCC), a non-profit that dictates the standards to which reputable credit counseling agencies must adhere. A visit to the NFCC official website, www.nfcc.org demonstrates that NFCC member agencies are those agencies that have been shown to engage in reputable credit counseling practices. The NFCC also sets the standards for credit counseling training. So, should you sign up for Advantage CCS credit counseling sessions, your counselor will have gone through hours of professional training so he or she can work to serve the needs of people with debt problems just like yours.
Advantage CCS is accredited by the Council on Accreditation (COA). They enforce the standards for credit counseling agencies, and they require the agencies to remain transparent and accountable in all activities. Those credit counseling agencies that are accredited by the COA and NFCC are reputable and trustworthy agencies.
The National Foundation for Credit Counseling has strict standards to which it holds all of its members. Member counseling agencies are forbidden from discriminating against anyone seeking counseling services. They are required to offer complete, one-on-one counseling and debt management services, and must document client progress. All counseling interactions with clients must be kept confidential and monetary fraud or abuse — including trading leads with debtors or charging illicit fees for counseling services — is expressly prohibited.
What are some warning signs of disreputable agencies? –
Disreputable agencies can look very different from the outsider’s perspective, but closer examinations of how they do business will usually unmask their fraudulent ways.
First, avoid any credit counseling service that promises to make all of your financial problems go away almost overnight – especially if they charge outrageous “starter” fees. The goal of a credit counseling service is NOT to make your money problems and debts disappear overnight. Instead, you will acquire the tools you need through counseling to make changes to your financial situation yourself.
The language fraudulent agencies use in their advertising is all-too-telling:
- “Pay now, we’ll erase your debts!”
- “Our credit counseling services eliminate your money problems within a month!”
- “Bye-bye debt! Sign up with us, and for a fee, you can wave your debts goodbye!”
Ask how much money a credit counseling service charges for sessions. There are agencies out there that can charge you thousands of dollars for services – and that’s money you’ll never see again. Credit counseling services like Advantage CCS help you to pay back the money you owe in debts and their credit counseling sessions are always 100% free. Fraudulent counseling professionals take your money for themselves to enjoy.
What credentials should I look for in a credit counseling agency? –
Ask to see credentials from the NFCC and the COA or another like-minded non-profit accreditation agency. If a credit counseling agency is not accredited, say “No thanks.” Over the long run, you will suffer for enrolling in counseling with an unprofessional or sham agency. You might get a counselor who has no professional credentials or training – and that person is going to tell you what you want to hear, no matter how unhelpful it ultimately is from a financial discipline standpoint. If a credit counseling agency is passed over for accreditation time and time again, there are usually many strikes against it, often involving financial fraud or theft from clients.
We hope you’ve found the information in this blog post about the most common credit counseling questions we hear to be helpful. Feel free to give us a call at 1-866-699-2227 or visit us online at www.advantageccs.org to find out more about Advantage CCS and see our accreditation list, partnerships, past client feedback, success stories, and much more!
Check out our Credit Counseling FAQ page for even more popular credit counseling questions that we’ve answered: https://www.advantageccs.org/credit-counseling-faqs