A credit counseling agency is usually considered as a non-profit organization. It gets its funding from three different sources: the creditors, the grants from the government, and the donations from private individuals or groups. The best consumer credit counseling service is the one that can help a person get out of his debt and eventually establish a good credit rating. But not all consumer credit counseling agencies can achieve this goal. And certainly, the phony ones push a person farther into debt. To avoid these scammers, a person must stay alert for signs such as the absence of accreditation, the demand for large fees, and the offer of immediate credit repair.
The lack of accreditation means that the credit counseling agency was never investigated and approved by either the NFCC (National Foundation for Credit Counseling) or the AICCCA (Association of Independent Consumer Credit Counseling Agencies). The NFCC and the AICCCA are organizations that attempt to establish professional and ethical standards of practices among credit counseling agencies. The legitimate consumer credit counseling services, because of their non-profit nature, demand a maximum set-up fee of only $20.
A fee which is greater than this indicates that the credit counseling agency can be bogus. And finally, if the agency assures that it can fix the credit rating in a very short time and completely erase the debt, a consumer should be extremely wary. Better yet, the consumer should look for another credit counseling agency.
The legitimate credit counseling services are always upfront about how they will go about helping a consumer recover from bad debts. The consumer is regularly updated with the progress. The credit counselors also undergo rigorous training. The range of consumer credit counseling services include budget counseling, debt consolidation, and various educational programs that will help the debtor permanently able to responsively manage his finances.