For a credit counseling service to be worthy, you need to get a few questions answered. There are a lot of honest credit companies. However there are also many charlatans running the show.

To start with, here are some of the the starter questions:

Major affiliation:

Does the credit counseling agency have major industry affiliation like the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling. If yes, the agency deserves some credibility. These associations have some standards that need to be met and followed.

Large fees:

Large upfront fees are usually a red flag. A good credit counseling company will charge a small fee to set up your account and then bill you a fee to administer your plan each month. If you pay a large setup fee and the company is not reputed, they might disappear overnight.

Is that possible?

To gain your business, at times credit counseling agencies will make promises that are unrealistic. If it seems too good to be true, it really is.

If you feel the promise to be unrealistic, ask

for the promises in writing. This way you have good evidence in case legal action becomes necessary.

Compare list of creditors.

Ask the credit counseling company which of your creditors have worked with them in the past.

Ask them for a list of your creditors and compare for yourself if they have been successful in reducing or lowering interest.

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