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How to Tell if a Credit Counseling Service is Legit


One of our readers, Steve Crowder, sent us this question:

I work in the credit card business and I have read your information on how the FICO score is computed. Good information but too bad that more people don’t get it. There are many credit counselors out there telling people to close out most, if not all, of their credit cards to protect their credit? I am seeing people closing out multiple accounts with wonderful credit histories that go back several years. It would seem that most of these so called credit experts are actually handing out advice that is directly counter to your information and can harm their believers. Is there any entity that monitors or certifies these credit counseling services?

Thanks for your question Steve! As it turns out, yes there are.

Here’s the lowdown:

There are a several organizations that require credit counseling services to go through an independent certification in order to join. The two main ones are the National Foundation for Credit Counseling (NFCC) and the Association of Independent Consumer Credit Counseling Agencies (AICCCA).

The National Foundation for Credit Counseling requires that all prospective credit counseling agencies follow all the laws in the area they work in, conform to the NFCC’s own member quality standards, and then they have to be certified by the Council on Accreditation, an independent organization.

The Association of Independent Consumer Credit Counseling Agencies (AICCCA) also requires independent accreditation, and they too, have their own set of guidelines.

So, if you are trying find out if a credit counseling service is legitimate, then look for these clues:

They should be non-profit and they should belong to either the National Foundation for Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA).

They should also be independently verified by at least one of the following two agencies, if not both:

The Council on Accreditation (COA), or the International Standards Organization (ISO).

You can search for agencies listed with the NFCC here, and agencies listed with the AICCCA here. You should also do a thorough check with the Better Business Bureau before you make your final decision.

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