Credit Counselors and Debt Consolidators are dominating the Internet, newspapers, magazines, radio, and television with ads promising to give you a miracle cure for your poor credit history and your poor FICO credit rating. This appears to be great news. Let's see if it really is good news.

Of course there are some credit counseling agencies and debt consolidators that can actually help get people out of debt. But there are many such services run by con artists who are after your money, money you probably can't really afford to spend. And, sadly, they have no intention of helping you.

There are trustworthy companies and shady companies among the hundreds of credit counselors and debt consolidators, and, good or bad, all appeal to your emotional distress to get out of debt. Let's consider the differences.

The Best Credit Counselors.

These services will actually help you clean up your credit history while improving that all important FICO credit score. They will help you realize where you went wrong with your credit decisions and then devise a plan to start correcting your bad habits.

Once your spending is under control, they will help you create a budget so you can change your money management style and stay out of debt and live a more stable financial life.

The Debt Consolidation Shell Game.

These companies operate with a slightly different agenda and my advice is: You should only consolidate your debts when you have exhausted all other avenues. It's true that debt consolidators also help you get out of debt, but they do so by making deals with your creditors to combine all of your obligations into one large loan with one monthly payment.

The pitch they make is deceiving. Yes, the payment on the consolidated loan will total less per month than the total of your current payments but, usually, the interest rate on the consolidated loan is high because you are high risk. This means you will end up paying back more in interest in the long run.

Again, avoid debt consolidation and, if you need outside help, go with a debt counseling service instead. They will monitor you and keep you from falling back into the habits that damaged your credit history in the first place. Consolidators, on the other hand, will only be concerned about you making your monthly payments on the new loan for which they collect a fee.

The ' Fix My Credit ' Crooks!

These crooks are obvious. Any ' fix your credit ' offer that claims they can magically erase your debt without you lifting a finger (except pay them) is a scam. Think about their claim. Creditors would have to forget you owe them money. Why would they do that? Some of these scams are designed to force you into bankruptcy. Sure, your debts will be gone but the record stays in your credit report for up to 10 years and your FICO credit score will plummet.

How do you find a reputable credit counseling company?

The first thing to look for is they should be endorsed by the Better Business Bureau or by some recognized financial services organization such as the National Institute for Financial Counseling Education. The debt counseling website should display a notice of endorsement or a logo and a link to their record with the organization endorsing them. Click through the link to check that there are no unresolved complaints against them.

An often overlooked source for information is your State Attorney General office. Many states have agencies that track complaints against such companies. They also give you the ability to sue a scam company for free. Check with them. And, of course, you can always run a scam check on line.

What can you expect to pay for services?

All credit counseling services charge a modest, affordable monthly service charge of approximately $30. Some also charge a registration fee in addition to the monthly service charge but this too is usually reasonable, around $50. If you are in dire straits financially, many offer reduced fees to get you started. This is negotiable so ask for it if you really need it.

Expect to fill out an application if you decide to go with a credit counseling agency. While you will be required to reveal your financial history, the agency is required to disclose the fees you will be charged, what services you can expect will be provided to you, and in what time frame all of this will be provided. Be sure to read the fine print!

What should you do? You can become your own debt counselor and discover, for free, how you can fix your credit yourself. The federal government has tons of free information online and don't forget to ask your local banker for free advice. They have an interest in keeping you as a customer. Also check local non-profit organizations for free counseling.