How to Spot Shady Credit Counselling Services

This fairly decent article outlines helpful tips on how to spot shady credit counseling services.

Ten (10) clues that the debt counseling agency may not be legitimate:

a) The promise of lowered payments. Payments cannot be lowered. Only the interest rates can be lowered.

b) The offer of 'debt settlement' services. You don't need them. You can do that yourself. Just pick up the phone, call your creditors and see what they are willing to negotiate with you.

c) Non-profits and profits are the same. You will not get a better deal with a non-profit organization.

d) They ask for account numbers before giving you a quote. This is not necessary.

e) Promises to negotiate charged-off accounts. This is usually not possible, and if so, this can also be done without the help of a credit counselor.

f) It is a jack of all trades and master of none. True debt counseling agencies can't wear too many hats at once because the business is highly specialized and calls for intense focus that doesn't allow much time for lots of other add-on services.

g) They advise you to include accounts with low interest rates that may end up going higher because they don't really know what they are doing.

h) They advise you to include student loans. Student loans usually charge the lowest non-adjustable rates available and are not negotiable.

i) They advise you to include state or federal tax liens. Tax liens are another area and need to be handled exclusively by a tax attorney.

j) Group quotes together rather than giving you a breakdown of how each creditor will be handled, which leaves you with no idea of how long it will take to pay off each account.

To read the complete article, click here.