How Credit Counseling Can Help You

Credit counselors offer free budgeting assistance and other services to help your finances.
Sean PylesAug 6, 2021

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Nonprofit credit counseling agencies offer free money advice — no matter your financial situation. You might want their help if you've recently lost your job and are struggling to figure out your budget or want to explore your debt payoff options.

While you can likely get the help of a nonprofit credit counselor near you, many agencies offer assistance over the phone or online nationally. Nonprofit credit counseling agencies offer a variety of services, including general personal finance advice, homeownership counseling and more. Some services are free.

Here’s a detailed look at what's offered, as well as how to choose an agency and get started.

The five main services available from credit counseling agencies are:

While credit counseling agencies typically offer many if not all of these services, they are primarily known for their debt management plans. Debt management plans are a form of  that is less drastic than  or .

In addition, many agencies offer educational courses and resources online, often for free.

The first step to working with a credit counseling agency is . Consider:

Accreditation and certification: Ensuring the agency you’re working with is accredited and certified is a good way to verify that it’s a reputable agency. Be wary of any for-profit company that purports to be a credit counseling agency.

Most nonprofit agencies are members of either the  or the . Both of these groups have certification requirements to ensure a standard level of education and quality among counselors. They also require accreditation, in which an outside body checks that standards of practice are being met.

Access: When choosing a credit counseling agency, ask yourself how you’d rather receive services: over the phone, in person or online. While many agencies are accredited in 50 states, most only offer in-person counseling in select locations.

Cost: Price of services varies by agency, state and individual financial need. Before you commit to a service, verify how much you’ll pay monthly so you fully understand the overall cost.

Be aware that nonprofit credit counselors are different from for-profit  companies, which offer services you can often do on your own.

Credit counseling services are also different from , which is marketed as a quick fix but it’s not a good option for most people.

Take a few minutes to gather the details of your finances before calling a credit counseling agency. The initial session will cover everything in your budget from a mortgage to movie tickets, so the more details you have in hand, the better.

Shop around. You can try the free initial session at more than one agency in order to compare. You’ll likely have an ongoing relationship with the one you choose, so you’ll want to be sure that you can afford the fees and feel comfortable working with its agents.

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