Guide to Credit Counseling Services
As a non-profit credit counseling agency, the goal of American Financial Solutions is to educate and advise our clients to make financial choices that lead to long-term, positive results. Credit counseling organizations can advise you on your money and debts, help you with a budget, offer money management workshops and much more. American Financial Solutions' certified credit counselors:
- Provide advice on managing your money and debts,
- Help you develop a budget that works for your situation,
- Can help you get a copy of your credit report and scores,
- Offer free educational materials and classes, and
- Organize a debt management plan to pay down your debts.
Debt Management Plan
If you are having trouble making payments on your debts or find yourself struggling to get out of debt, a credit counselor may be able to help you with advice or by organizing a debt management plan for all your unsecured debts. Typically, under a debt management plan you make a single payment to our credit counseling organization each month and we make monthly payments to each of your creditors. Under the debt management plan, we usually do not negotiate any reduction in the amounts you owe; instead, we work to lower your overall monthly payment. We achieve this by consolidating payments and asking creditors to lower the interest rates and waive certain fees. You receive credit for repaying your debts in full. We will not ask you to fall behind on your accounts, as is common with debt settlement companies.
How do I find a credit counselor?
Like American Financial Solutions, most credit counselors offer services over the phone, in person or online. Be sure to check the credentials of anyone you decide to use to help you with your finances. Contact your state attorney general and your state consumer protection agency to check the background of credit counseling agencies.
Here are some questions, from the Consumer Financial Protection Bureau, to ask to help you find the best credit counseling service for you.
How do I choose which credit counselor is right for me?
A reputable credit counseling organization should be willing to send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a service doesn’t do that, consider this a red flag and go elsewhere for help.
What services do you offer?
Look for an organization that offers a range of services, including budget counseling and classes for managing spending and debt. Avoid organizations that push a debt management plan as your only option before they have spent a significant amount of time analyzing your financial situation.
How is credit counseling offered?
Services may be offered in-person, by phone, or online. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.
Do you offer free educational materials?
Avoid organizations that charge for information.
What are your fees? Are there set-up or monthly fees?
Get a specific price quote in writing. Although most credit counseling organizations are non-profits, credit counselors may charge fees for some of their services that they take out of the payments you make to them.
What if I can't afford to pay your fees or make contributions?
If an organization won't help you because you can't afford to pay, look elsewhere.
Will I have a formal written agreement or contract with you?
Don't sign anything without reading it first. Make sure all verbal promises are also in writing. As with any contract, don’t sign anything that you don’t understand.
What are the counselor’s qualifications?
Is the organization or counselor accredited or certified? What are the qualifications of its credit counselors? Find out about what training or professional certifications the counselor has received.
How are your employees paid?
Are the employees paid more if I sign up for certain services, if I pay a fee, or if I contribute to your organization? If the answer is yes, consider this a red flag and go elsewhere.
Other services provided by American Financial Solutions and other credit counseling agencies include:
- Foreclosure intervention and assistance services. *
- Provide pre-purchase housing counseling to prepare people for home ownership and prepare loan packaging for USDA Rural Home Loans,
- Assist with student loan counseling, and
- Provide pre bankruptcy counseling and/or post-bankruptcy debtor education.
Acting in the face of overwhelming financial worries can be hard. Getting advice, direction and encouragement from someone you trust can make all the difference. That’s the first thing to expect from American Financial Solutions: you’ll talk with someone who cares about your success. Pick up the phone and call today or click on Get Started Now near the top, right-hand side of your screen.
*Washington State only.
Published Feb 18, 2020.