Does Credit Counseling 'Work'?

Credit Counseling Success Depends on YOU:

Given that 70% of credit reports have errors, you may be surprised how hard it can be to correct just one item! If you have found this blog, chances are you have an issue that is not going away fast. It is generally true that it takes more time to rebuild your credit than the time it took to create the problem. Ah, hindsight!

USA consumers have a right to correct and dispute items on their credit reports.

You also have a right to receive Housing Counseling. The Consumer Financial Protection Bureau (CFPB) offers a wealth of up to date advice on their site on how to build good credit and find an independent HUD counselor in your area who can advise you for little or no cost. It's a great starting point on your journey to better understanding of your finances. 


Check out the CFPB: http://ww.consumerfinance.gov

Alternatively if you Google "how to improve my credit score" you will be inundated with information. But the fact is, many people who have had their identity breached or suffered serious financial stress often feel overwhelmed. Starting with HUD gives you a sense of where to start and address your specific issues. 

Take a deep breath and call 800-569-4287 and ask to be assigned a HUD counselor. They will ask a few questions and have someone call you back to set up an appointment and explain the process.

Search for a HUD counseling agency in your state and zip code:

http://www.consumerfinance.gov/find-a-housing-counselor/   

You will be asked to gather your documents and make an appointment to discuss your situation over the phone an assigned counselor. Naturally, as in any organization, HUD Counselors agents vary in their expertise. If your situation is complicated and you're not feeling the love - be polite, hang up and dial the HUD Hotline again and ask for another person to assist you. They will be polite too. 

If you want more help than the conversations offered by HUD counselors: You may seek out a Credit Counseling Agency. There are some very good Credit Counseling agencies who do know what they are doing. They will generally offer to work with you for a certain period of time for a monthly fee. During the process you will be asked to participate as they explain the steps. If you don't participate then it would be a waste of your money perhaps better applied toward lowering your credit card balances! 

As in any situation where you are hiring someone for their expertise: Interview them for the job! Most agencies offer a free consultation to find out if their process will work for you. And before you decide to hire them - find out if they are legitimate. When I worked in an FDIC Bank, as a representative of the firm, I was asked not to refer people to anyone. Period. 

So where are the good people and how do you find them? 

Ask a friend, a member of your family or your clergy. Your employer, accountant, church, Public Library or Senior Center may also have resources. Librarians love to help people! Some community organizations offer credit counseling. Generally, unless they are HUD certified or a legitimate licensed credit counseling business, you could be taking your chances. Some people masquerading as counselors could be scam artists. 

If you are currently qualifying for a mortgage your lender may be able to handle some items on your behalf. Your loan officer may know of a reputable resource. After your lender reviews your credit report, they will provide a Consumer Explanation Letter which outlines issues negatively impacting your credit. A good lender should be able to explain the impact of specific issues to your loan application.  

If you are not sure about any business: Call your local State Attorney General and ask if the person or company is licensed and if there are any complaints about them They keep tabs on who is operating legally in the state and it's their job to protect consumers from fraud. In fact your State Attorney probably has a website with lots of identity theft resources so always look there as well. 

Washington State Attorney General site: http://atg.wa.gov/consumerline

Feeling overwhelmed? Believe me, from personal experience: the day you resolve to rebuild your credit and clear your good name, you will feel one hundred percent better. Taking that first step is worth it!

Since the nature of credit issues is so personal, you want to know your conversation is confidential and that the company keeps records secure. Beware of anyone who cannot answer your most basic questions about how they operate, what they charge, and what to expect in terms of your own involvement. Generally speaking a Credit Counselor will not do anything 'for you'. They will instruct you how to make the changes to improve your credit.

A Credit Counselor may ask you to forward documents that you receive from the Credit Bureaus during the process so they may assist you in understanding correcting your records. You are driving the bus here! So if someone suggests you pay a particular card balance down - ask them why - and they will explain the impact that particular card is having on your overall credit. Professionals know how the credit algorithms work. You may cancel the process at any time. 

Toward the end of the process. it’s extremely important remove any "disputes" from you credit file at the three Credit Bureaus: Equifax, Transunion and Experian. After you have resolved and corrected issues, if the items continue to report in dispute status, this removes that item from your credit score and presents issues for lenders. So be sure you check report again and have those disputes cleared. After all that work you deserve the benefit of improved credit. 


Go forth and prosper!

© 2015 susan templeton