(Franklin Debt Relief offers a debt settlement program to consumers and is not a credit counseling agency.  The information presented below is for educational purposes, so that consumers can make a more educated decision on whether debt settlement, the service offered by FDR, or credit counseling, the option described below, is a better debt relief solution for their situation).  

As maintained throughout our website debt settlement is not the appropriate debt relief option for everyone. For consumers who are overextended that find credit counseling is a more suitable debt relief choice for them, we encourage them to choose that path. Just remember, there are reputable and not-so-reputable credit counseling agencies, so it is important for consumers to do their homework prior to enrolling with a company. The purpose of this article is to give some helpful tips and pointers for consumers who are looking for a credible credit counseling organization:

1. Watch out for the fees – Beware of a credit counseling organization that charges “voluntary contributions” as a one time set up fee or a per-creditor charge on top of a monthly maintenance fee. Others have been known to charge membership fees, an application fee, or in the worst case, a fee just for a consultation. Read through the contract you receive. Many will slip in sentences about “voluntary contributions” somewhere in the fine print. Needless to say, more reputable counseling agencies steer clear from this sort of behavior. Also, keep in mind that it is possible to find a credit counselor that will waive the fees altogether if you demonstrate an inability to pay them. For students, senior citizens, and military personnel, some agencies automatically waive any fees associated with their service. It is just important that you find them.

2. Beware of non-profits that are actually for-profit – Credit counseling agencies have the incentive to become non-profit because it makes them tax-exempt, allows them to skip around strict telemarketing regulations, and most importantly, it qualifies them for special benefits from the credit card companies themselves. Non-profit status ensures neither legitimacy nor affordability.

3. Make sure the credit counseling agency is licensed in your state – Many states have laws requiring credit counseling agencies to be licensed and bonded specifically in your state. It may also help if the organization is a member of either the AICCA or NFCC, the credit counseling trade organizations. Both have adopted rules and accreditation policies that they require members to follow in order to self-police the credit counseling industry from bad actors.

4. Continue to monitor your progress – Once you’ve enrolled, continue to check your monthly statements from your creditors to ensure that they are paying your bills on time. This is the fastest and easiest way to track the legitimacy of a credit counseling organization.