Credit Counselling Services

How to Choose a Credit Counselling Agency

Consolidated Credit Counseling Services of Canada, Inc. is one of many credit counselling agencies in Canada. Consolidated Credit, serves Canadians from coast to coast with offices in most of Canada’s larger cities. We are also a not for profit registered charity. Those who are in debt and believe they require credit help should carefully research the companies before doing business with them.

Many credit counselling agencies provide valuable advice, education and assistance, but consumers need to be wary of the "quick fixes" offered by some organizations. Consumers can help protect themselves from deceptive credit counselling practices by knowing how to choose a credit counsellor. If you are in need of credit help, a counselling agency may be able to work out a Debt Management Plan for you. Credit counselling agencies negotiate special programs with creditors that are not available to the general public.

Choosing an honest reputable credit counselling agency can be one of the most important personal finance decisions of your life. Use the following as a guideline to help you choose wisely:

• Check with the Better Business Bureau to find out if consumers have filed complaints about the provider you are considering. Most importantly, find out if the issues have been resolved.
  
  
• Know your rights under the Financial Consumer Agency of Canada http://www.fcac-acfc.gc.ca/eng/consumers/default.asp
  
  
• Make sure to use a registered charitable organization. A non-profit status alone does not insure that the organization will do a good job, but coupled with fair fees and educational material it is a good indication of a reliable organization.
  
  
• Remember that credit counselling agencies cannot erase your credit history. If an agency claims to be able to do so, do not work with them. Under the Credit Reporting Act, accurate information about your accounts can stay on your credit report for up to seven years.
  
  
• Find out what other sources of funding they receive, who regulates and audits their operation, if their counsellors are trained and by which association, and if there is a formal written agreement.
  
  
• Ask if you will continue to receive statements from your creditors showing what interest rates you are paying and the reduction of your debt each month.
  
  
• Make sure your creditors are willing to work with the agency you choose. If they are, follow up with those creditors regularly to make sure your debt is being paid off.
  
  

A trained counsellor will:

• Do your budget, including your expenses and income
• Figure out the total amount of debt you owe
• Arrive at a figure you can pay each month toward that debt while satisfying your creditors' requirements.

The credit counselling agency will:

• Save you money by negotiating with your creditors to lower or eliminate your interest rate and finance charges, and perhaps be able to lower your monthly payment
• Distribute your monthly payment to your creditors

The agreement should outline:

• The services to be performed
• The payment terms for these services
• How long it may take to achieve results
• Any guarantees offered
• The organization's business name and address

Before you sign the agreement read it through in detail and ask questions, such as:

• What happens if repayment is more than you can afford
• How secure is the information they provide
• Find out up front what the cost will be and make sure they put it in writing
• What is the monthly maintenance fee

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