Identifying a Legitimate Credit Counselor

Nonprofit housing and credit counseling agencies are great resources for a homeowner struggling to make ends meet. But do your research; a disreputable counselor can actually do more harm than good.

There are scam artists who prey on homeowners. Some will even try to strip a home's remaining equity through foreclosure "rescue" scams, which can actually cause homeowners to lose their homes. So be careful, and ask questions when reaching out for help.

Call the Homeowner's HOPE^TM Hotline at (888) 995-HOPE to get help. If you are researching agencies on your own, consider the following:

• HUD-approved housing counseling services are free, so if an agency charges a fee, look very carefully at what type of services you are being charged for.
• Is the agency accredited by a recognized accreditation organization such as the National Association for Credit Counseling?
• How long has it been in business?
• Does it have audited financial statements?
• Does it have community presence? In other words, does it have branches that are open to the public?
• Does it have the required licenses to do business in the state where you live?
• Have complaints been filed with the Better Business Bureau in the community where it is located?
• Does it provide a written "Action Plan" after each counseling session?

You can find a credit counseling agency in your local phone book or by contacting the U.S. Department of Housing and Urban Development (HUD) at (800) 569-4287 on weekdays between 9:00 a.m. and 5:00 p.m. Eastern time. You can find a list of HUD-approved agencies on their Web site.