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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.

Have a question for us? Leave a comment below!

September 7, 2008 @ 12:32 am

I am considering credit couseling services. Someone told me if I decided to go through with the program, it could impact my credit – making it worse than bankruptcy. Is this true? I’m having a hard time believing it is, but I’d like to get another opinion. Thanks

October 14, 2008 @ 4:46 am

This post represents great advice. So many organizations are poised to part debtors from what little money they still have.

I would add that even among the legitimate credit counselors, it may be more beneficial to work with your creditors directly. I found that one of the big agencies could only offer to lower rates on two credit card companies. Rates from two more issuers would actually have gone UP under their plan.

I did better on my own. Maybe you can too.

To take a stab at answering Sharon’s question, I think that when you agree to work with a credit counselor you must close all your credit accounts, and that can negatively affect your credit score, especially if it is marked as closed by lender. Even if it isn’t, closing multiple accounts can change your debt to available credit ratio, which, again, can hurt your score. As I understand it.

I even had a lender offer NOT to report they had closed the account if I would agree to pay an additional fee. Doesn’t that sound like hush money?

January 7, 2009 @ 6:40 pm

I highly agree that you call on your own behalf! If they give you a hard time ask for there manager immedialty! It either resolves the sitiation real fast and they start working with you or you get the higher up. Call daily if you are having a hard time getting any where.;) I have done that.yes it stinks we would rather be doing something else! Make it easy if you have multiple cards do one a day…well worth your effort! I will tell you once you make a good deal,always pay it on time!

August 6, 2009 @ 9:50 am

That is what good true information means.Thanks jenna,real good post hopeful many people will read it and know after that what they have to look for when they are choosing this kind of services so they will have satisfactions after

December 22, 2009 @ 12:54 pm

Anyone heard of Beneficial Services? They called and said due to my outstanding payment history they would like to help me lower the interest rates on my credit cards as long as I had 4,000 or more in debt. They gave me a phone number and contact person which I called to verify but wouldn’t give me a website.

Anyone know if its legite or not?

June 24, 2010 @ 5:32 pm

Is the Consumer Credit Counselors at 206 4th St. in Wilmington, NC legitimate? I have an appointment there next week. Please advise. Thank you, S. Keenan

June 24, 2010 @ 5:33 pm

Are the credit counselors at CCCS at 206 4th Street in Wilmington,NC legitimate? Please advise. Thanks, S. Keenan Consumer Credit Counselors is their name.

Arlene Johnson
July 26, 2010 @ 2:37 pm

In 2000 I was pretty desperate. My CC’s were maxed out & while I was never past due, I was making minimum payments & my cards were all over 22%, so I was never able to get ahead. I thought I owed about &35000. I saw an ad on TV for credit counseling services & met with the people there. When I sat & summarized my debts they were in excess of $55,000. For a monthly fee of $25 they handled the negotations & subsequent payments for me. I had to mail a cashiers ck or MO monthly. After a few months I had them EFT it out of my account. After 60 months paying $990 a month I was debt free. I was NEVER late or did not pay. True one of the bi-products of setting up any kind of interest reduction plan, most issuers will close your account. Another condition that you agree to is not open or incur any NEW debt. That too makes sense to me. It has been 5 years & I have a CC with a $10,000 limit by one of the CC companies who I owed the most too. Ironically they had bought 3 of the companies I had cards to, so that is how I ended having so much outstanding with them. And a year ago they even bought the bank I have my accounts with. So now my total entire banking relationship is with them.

Holly Marrow
August 23, 2016 @ 8:19 pm

At present, I don’t want an agency to contact any of my creditors. What I am looking for is a legit person/agency to give me some sound financial/money-management ADVICE. I’m trying to decide if it makes sense to borrow from my 401k to pay off debt… and have a couple other thoughts I’d like to bounce off of someone in-the-know. Any advice?


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