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Credit counseling: 6 red flag indicators
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There are numerous credit counseling organizations out there and while most are legit, there are a few that you should steer clear of.
These days not only do you have to worry about whether a legitimate company is on the up and up, but you have to be wary of spammers, con artists, and identity thieves.
Word of mouth is a great reputation indicator for a credit counseling organization. Chances are, if your friend or co-worker highly recommends their services, you can feel more secure in selecting them to do business with. However, many times individuals do not want to ask others about the reliability of a credit counselor because they’re ashamed or embarrassed to acknowledge their personal financial inadequacies.
In the event you are one of those people that wish to sail the sea of credit counseling alone, below are six red flag indicators; if even one of these apply to an agency you are considering, you may be better off looking somewhere else.
- Insist their services are free, but pressure you to make “donations” or “contributions” for their efforts.
- Proceed with enrolling you in a debt management plan without asking about your financial situation.
- Discuss enrolling you in a debt management plan prior to going over budgeting and ways to personally manage your finances.
- Charge an initial fee to get started or monthly fees for credit counseling.
- Insist that you make payments toward a debt management plan prior to creditors accepting a debt management plan for your accounts.
- Refuse to send free information that details their services unless you give them your financial information.
Coming up next – What to look for in a credit counseling agency
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