Consumer Credit Counseling Services

Is it Right for You?

Federal Consumer Relief provides an established debt settlement program, comparable to a traditional credit consolidation service.

There are other options out there, some of which may or may not be in a consumer’s best interests. Because we believe in educating our valued clientele, one option – consumer credit counseling – is described here.

A consumer credit counseling service negotiates with creditors to lower a client’s interest rates, which allows the client to make headway on the principal of their debt for each account. Under a reputable credit counseling program, your creditors may also be willing to waive your late fees and other penalties incurred. Rather than paying your creditors directly, you would make one monthly to your counseling firm. The firm would then distribute the funds to your creditors as necessary. While participating in their credit counseling program, you would be required to agree to cease credit card activity.

There are pros and cons to credit counseling. As stated, it can result in a lowered interest rate for one or more of your accounts. This is an obvious benefit associated with taking advantage of a credit counseling service. On the downside, consumer credit counseling can mean a binding commitment to a lengthy, complicated program that carries penalties if not followed explicitly. 

Types of Credit Counseling Companies

Credit counseling companies can market themselves a variety of ways, which may make it difficult for consumers to discern which programs are truly reputable. Some of the ways consumer credit counseling firms offer their services include local offices, the Internet and billboard ads. Consumers may be confused regarding the legitimacy of any one service, especially because many credit counseling firms advertise themselves as non-profit agencies.

At Federal Consumer Relief, we warn consumers against taking advantage of “free” or “non-profit” credit counseling services. In addition to making the monthly payment toward your debt, most credit counseling companies require upfront fees in addition to monthly maintenance fees. Remember: If it sounds too good to be true, it probably is.

For many consumers, a better option is to find a credit counseling organization that offers live, in-person counseling with a credit expert. Good resources for this type of service include:

• Colleges
• Military bases
• Financial institutions
• Religious organizations

 At Federal Consumer Relief, we urge you to be wary of credit counseling organizations that:

• Require high up front fees monthly fees or maintenance fees
• Pressure you for voluntary “donations,” which they will say go towards “continuing providing these services for others”
• Fail to disclose the negative consequences counseling has on your credit
• Refuse to send you information without obtaining your financial information first
• Attempt to enroll you in their program the first time you speak with them (without first reviewing your personal financial situation)
• Offer to enroll you in a credit counseling program without first offering you  information on budgeting and money management
• Demand that you make a payment toward their program before your creditors have agreed to reduce your interest rates and payments

Rather than placing your future in the hands of an untested credit counseling program, trust Federal Consumer Relief to negotiate your debt through our established, field tested debt settlement program.

For more information, please see the “Get Help Now!” tab at the top of the page. After completing the form, you will be contacted by a friendly Federal Consumer Relief representative for a free, no obligation phone consultation.