Question

couple finds that they are experiencing debt problems and decide to find a credit counseling agency. What are three (3) things that the couple should find out about an agency before they allow the agency to represent them?

Answer 1

Three clear things to check before you let a credit‑counseling agency represent you:

1) Credentials and reputation
- Is the agency accredited or a member of a recognized trade group (for example NFCC or FCAA) and are the counselors certified?
- Is it registered/licensed where you live (some states require registration) or HUD‑approved if you need housing counseling?
- Check complaint history: CFPB, state attorney general/consumer protection, and BBB records; ask for references or past client outcomes.

2) Fees and payment handling
- Get a full, written fee schedule up front: any enrollment or monthly fees, up‑front charges, and whether fees are refundable.
- Ask who receives your payments (the agency or your creditors) and how payments are applied; find out what happens if you miss a payment.
- Watch for large up‑front fees or pushy payment demands—these are common scam signs.

3) Scope of representation, written terms, and likely outcomes
- Exactly what will the agency do on your behalf (negotiate interest/fees, enroll you in a debt‑management plan, contact creditors)? Ask for a written agreement describing services, timeline, and any actions you must take.
- What authority will they ask for (power of attorney, ability to stop creditor contact)? Will they report changes to credit bureaus and how will the plan affect your credit?
- Ask about realistic expected results and that there are no guarantees; request examples or success rates and a clear exit/cancellation policy.

Quick red flags: guarantees to remove accurate negative credit info, large up‑front fees, pressure to sign immediately, refusal to provide a written contract or references.