Safe Credit Counseling

Finally on the Right Path

If you read yesterday and are thinking of searching out credit counseling, I have a few recommendations.

1. Make sure the agency is non-profit. They should not make any money off of you and they should have schedules for when your creditors are paid-especially if they say they are paying them. Research the company thoroughly before you give them access to your money. MMI didn’t take anything from me until they proved to me the deals they’d brokered with the creditors. I still have access to all my creditors so I could call myself and ensure the deal. Go through NFCC and you should be safe. ***

2. Go in person-at least the first time. You can do all of this online or over the phone, but I highly recommend an in-person interview.  Not only does this give you more opportunity to weed out the creeps but there is something powerful about having to look someone in the eye and not only admit how you got here but set a plan for how to get out. There is a reason it’s called credit counseling.

3. That said, choose a company with plenty of phone and internet support. I check my account and have moved payments around when necessary and it’s all because I have great support from MMI.

4. Stay actively involved.  Yes, someone may be paying your bills for you, but you NEED to know where you stand balance wise, not only to make sure the money is getting to the creditors, but also because if you’re anything like us, not paying attention is what got you here in the first place. So, update your balances and check in with the agency from time to time. It’s also fun to watch those numbers go down.

5. Take advantage of the education. If the company is worth its salt, they will not just pay down debt, but they’ll offer plans to make sure you don’t end up in debt again. They’re invested in your financial well being, not just taking your money.  MMI offers budgeting tips, credit score advice etc. I haven’t used everything, but when I’m wondering what to do next, I turn first to my trusty MMI folder to see what they tell me to do.

The bottom line: be smart. If they are offering you a deal that seems to good to be true, it is. My husband and I had to close all our credit cards. Our credit score took a hit (but not huge) and we make a huge monthly payment. No one is going to let you out of debt completely pain free. Keep that in mind when making deals.

No matter the sacrifices, it’s worth it. Our credit score will come back and in the meantime we will be completely debt free in just over two years. The best part though is that during the time we’ve been paying off our past sins, we’ve learned so much and gotten so much stronger with our finances that we know we’ll never end up here again.

*** Update: Just before buying our house, our realtor suggested we see a “credit counselor” to help clean up our credit report and raise our credit score. We trusted him, so we did it. It cost an outrageous amount of money ($200 a month for BOTH of our names) and as far as I can tell they did nothing. Their job, they claimed was to fight creditors for bad marks on our report. In theory, if not all i’s are dotted and t’s crossed, they can get bad marks off your record even if you actually earned them. In two months, nothing was removed from our records and we were out hundreds of dollars. The fact is, there is  no short-cutting a good credit score. Do the work. Pay your bills and work with your creditors and your score will improve based on that. In the end, we got the house with a decent loan all on our own. No “counselors” needed.