Credit Counselors Revealed: 7 Important Questions To Ask Before Hiring One

use questions to find the best credit counselor

If you're about to use a credit counselor, chances are you're already in a credit crunch. The last thing you want to do is get buried deeper in debt by choosing the wrong person or firm to help.

When you use a credit counselor, you invest a lot of trust that the person on the other side of the table will have the experience and expertise to help you get out of a jam you can't see a way out of on your own.

So, when you've chosen a counseling firm to visit in hopes of using its services, you should come armed with a series of questions to make sure it's right for you. The answers to those questions will help you in picking a credit counselor - or in deciding that it would make more sense to seek help elsewhere.

Getting started

ask about services, education, tools, and charges

The best place to start - and potentially stop - is with this question:

What services are offered by your firm?
The answer is vital to whether there's any point in sticking around. The organization should offer a wide range of services, including education about debt, budgeting and alternatives for handling debt. If the sole focus is on a debt management plan, it's best to look elsewhere. While that could be the proper solution in the end, you need to find a counselor interested in exploring all the potential options.

Other filtering questions would be:

Do you have some educational materials I can read about debt problems?
Such information should be readily available and provided for free. If you are asked to pay for basic information like that, you should look elsewhere.

When we make a plan, will it include tools to help avoid a similar situation in the future?
A reputable credit counselor will not only look at your current predicament, but aid you in moving forward. They should want to make sure you don't you get into the same jam again.

How much do you charge for your services and what if I can't afford to pay right now?
Many agencies have a set-up fee and monthly charges while you are working with them. They should put those in writing before you sign up. In addition, you should be able to find a qualified counselor at an agency that will be able to provide service regardless of whether you can pay.

Verify their qualifications

verify their qualifications

Ask about what the agency is accredited by either the National Foundation for Credit Counseling or the American Association of independent Credit Counseling. In addition, take pause if an agency tries to sign you up for their services without having had a thorough conversation about your situation.

And you should ask these questions, too:

Are you certified to provide counseling services and, if so, by whom?
It's important to know your counselor has a certification from an accredited organization in the type of work they are doing. If they do not have a certification, ask where they received their training. Ideally, it would be from a credible outside source.

How are the employees at the counseling firm paid? Do they receive bonuses or additional pay for signing me up for additional services?
If the answer is that employees are working on some sort of bonus system, you should go elsewhere. Their interest should not be in how much business they drum up from you, but in how to best resolve your situation.

Are there any creditors your agency does not work with? If so, which?
If they are companies you owe money to, it's important to know how those debts will be handled.

When I put money in an account for you to pay my creditors, how much of that goes to them and when?
You need to know how your debts are going to be resolved. And not every organization handles those payments in the same manner. Indeed, some less reputable firms might even keep your first payment, or more, as compensation for their work.

In addition, you'll want to be sure that you get all proposed fees in writing. And don't sign any agreements until you have read what you are agreeing to and understand what it says.