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(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.
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