4 Smart and effective tips to avoid credit counseling scams

Credit counseling agencies provide valuable service to the individuals suffering from debt problems. The credit counselors help the distressed debtors to get out of financial problems. They make a budget plan and suggest effective money management techniques to the consumers. In the last few years, an increasing number of debtors are approaching counselors to repair their damaged credit. Though it is true that a lot a number of credit counseling agencies have come up in the market to help the struggling debtors, there has also been a rise in the number of fraudulent credit counseling agencies. Thousands of innocent consumers are becoming the victims of credit counseling scams. Go through the article to know about some effective tips that can help you avoid credit counseling scams easily.

Tips to avoid credit counseling scams

Here are some effective tips to avoid credit repair scams:

Accreditation: The first tip will be to check whether a particular agency is registered with the NFCC (National Foundation for Credit Counseling) and Association of Independent Consumer Credit Counseling Agencies (AICCCA). You can even check it’s reputation with BBB (Better Business Bureau). If a particular agency is not recognized by these organizations, then be sure that it’s a scam.

Identity: If a credit counseling agency asks you to make new employer identification number or credit identity, then don’t do so. You should know that this kind of an act is forbidden by law. A genuine credit counseling agency will never ask you to do this kind of a thing.

Ask for a written agreement: Verbal agreements or promises are not legally binding. Therefore, it is essential to ask for a written contract. Go through the written agreement minutely. Check whether or not the written agreement includes the following information – contact details of the agency, services they will be providing, payment plan, fees, etc.

Fees: Some fraudulent credit counseling agencies charge extra-ordinary fees in the name of voluntary contributions. If any agency asks you pay extremely high fees, then it’s better to move on. Genuine credit counseling agencies will never ask you pay high upfront fees. You should also know that initial consultation is always free. You’re entitled to get free counseling for about 6 months. In most of the cases, it becomes extremely difficult to contact these agencies once you’ve paid the fees.

Finally, if any credit counseling make big promises such as fixing your credit report overnight, removing bankruptcy from the credit report and solving your debt problems within few days, then beware. It is surely a fraudulent agency.

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