Why work with a credit counselor before buying a home?

There are all sorts of circumstances that contribute to a lower credit score – some that are within a person’s control and some that aren’t. Rather than dwell on what could have been done in the past, perhaps it’s a good idea to figure out what can be done now. And speaking with a credit counselor might be a good option for those who are considering buying a home or refinancing.

Counselors are hired to discuss clients’ financial issues and work with them to develop a plan that solves whatever financial difficulties they are experiencing. They are trained in areas such as personal finance, budgeting, and money management. The organizations credit counselors work for are often non-profit and charge fees that only cover their expenses.

Credit counselors can provide a variety of services such as developing a budget, managing money and getting a copy of a credit report. In essence, what they do is assess a client’s situation and develop a plan to get finances and money troubles under control. Some of the services may be individual and some may be group oriented.

Finding a credit counselor should be relatively easy. The Consumer Financial Protection Bureau states that a counselor can be found by searching on the Financial Counseling Association of America’s website (https://fcaa.org/) or the website for the National Foundation for Credit Counseling (https://www.nfcc.org/).

Once you settle on an organization, there are a few things to keep in mind when finally settling down and getting to work with a counselor:

Avoid organizations that charge for information:

Granted different organizations will charge fees for different services. But you should be suspicious of one that charges you for basic information or education materials. If you are just trying to get an idea of what an organization offers, you shouldn’t have to pay for it.

Get a firm grasp on the services the organization offers:

You want to focus on an organization that offers a variety of services, not just one or two. An organization that offers services on budgeting, spending, and debt management is better than one that only offers one of those services. And an organization that begins to offer blanket advice without examining a client’s finances is one you probably should avoid. Be sure to ask if they sit down and examine financial statements to get a solid picture before they offer advice.

Get a fee structure in writing:

There aren’t many counseling agencies that can afford to do anything for free. They will charge for some services. Be sure to talk to your counselor about any fees they charge for the services they offer, especially the ones they specifically suggest for you. Organizations will even offer help with paying for those fees if necessary.

Be sure of the counselor’s qualifications:

You wouldn’t trust an auto mechanic that doesn’t have qualifications. You shouldn’t trust a credit counselor who can’t provide some verification of accreditation or certification. Don’t settle for less. And if you are suspicious of those qualifications, either check them out independently or seek help elsewhere.

Better Lending is ready to make sure that you can buy the home you’ve always wanted. When you’re ready to take the next step, call us at 888-400-1343.