How to choose a certified credit counselor
Finding the best credit counselor for your debt needs
According to TransUnion, the average person in the U.S. with a credit card is carrying $5,474 of credit card debt, and the average personal loan borrower has $10,749 of personal loan debt. That’s a lot of financial stress.
If you are feeling weighed down by your own debt load, there are solutions. Your first step should be to talk to a certified credit counselor, who will offer advice and options on how to reduce your debt without ruining your credit.
“[The credit counseling company] supported me in helping pay off a credit card and closed the account for me,” said one reviewer from Chicago. “That allowed me to continue to make set payments on that card and then paid it off in a few years. I was assigned a credit counselor and I could reach out to them specifically. They were very communicative with the status of my account and they were always providing email updates and contact information if I ever had questions.”
Here’s how to find a certified credit counselor you can trust with your finances.
Key insights
- The role of a certified credit counselor is to help individuals with budgeting, debt management and credit repair.
- Look for counselors affiliated with recognized credit counseling agencies or those certified by reputable associations.
- Credit counseling can be conducted in person, over the phone or online.
What is a certified credit counselor?
A certified credit counselor is a professional who specializes in helping individuals navigate tricky financial situations and overwhelming debt loads. These counselors are trained and certified in the field of credit counseling, and they have a deep understanding of personal finance, budgeting, debt management and credit repair.
They also help find specialized assistance if you have a specific financial problem or need, like bankruptcy credit counseling or a debt management program.
Their role is to help you gain control over your finances, develop effective money management strategies and work towards achieving your financial goals.
How to find a credit counselor
When seeking a certified credit counselor, look for counselors who are affiliated with recognized credit counseling agencies or have certifications from reputable associations such as the National Foundation for Credit Counseling (NFCC), the National Association of Certified Credit Counselors (NACCC) or the Financial Counseling Association of America (FCAA).
These certifications ensure that the counselor has undergone rigorous training and adheres to ethical standards. Avoid for-profit credit counseling companies, since they may use shady tactics or try to pressure you into a debt settlement program by telling you to stop paying your bills.
If you’re looking to work with a local credit counseling agency, the Department of Justice keeps a database of approved credit counseling agencies by state and judicial district as well as approved credit counseling agencies that offer services in languages other than English.
In-person, over-the-phone or online credit counseling services
If you’re more comfortable meeting with a credit counselor in person or talking with a credit specialist on the phone, make sure the credit counseling companies you’re looking into offer those services.
Credit counseling cost
Remember, don’t let a credit counseling representative pressure you into joining a program or making a large upfront payment. These red flags indicate that you’re not working with a nonprofit credit counseling agency that has your best interests in mind.
Questions to ask your credit counselor
It is important to feel comfortable and connected with your credit counselor, since you will be diving into your personal finances. Dealing with debt can be emotional, especially when you feel like everything is against you. The right credit counselor will make you feel heard and validated and give you advice and solutions to get back on track.
“I was in a financial mess. I had credit cards, store credit cards, and items in collection that were taking a toll on me,” said one reviewer from Georgia. “I became depressed and upset with every phone call from a [creditor].”
The credit counseling company this reviewer chose asked them to shred their credit cards. They said: “I did and became liberated from that moment on. I had a plan to get me out of this debt that had overtaken me. They halted the phone calls from my creditors and I was able to see balances paid off.”
Here are some common questions to consider asking:
- On average, how long does your credit counseling program take?
- How will completing your credit counseling program help me avoid financial problems in the future?
- How much does your credit counseling course cost?
- Are you certified through the NFCC, NACCC or FCAA?
- Are you licensed to offer services in my state?
FAQ
How can a credit counselor help reduce my debt without hurting my credit?
A certified credit counselor will work with you to create a budget, develop a debt management plan, negotiate with creditors on your behalf and provide guidance on managing your finances responsibly. Debt settlement programs are the ones you should be wary of, since this practice can have a bigger impact on your credit score.
How long does a credit counseling program typically take to complete?
The duration of a credit counseling program can vary depending on your individual circumstances, such as the amount of debt and your ability to make payments. Most of the companies we have profiled say it can take most clients between 24 and 48 months to become debt free.
How can a credit counselor help me avoid financial problems in the future?
A credit counselor can help you understand the root causes of your financial challenges and show you strategies to help you avoid similar problems in the future. By keeping your debt load minimal and your credit score high, you should be able to avoid future money issues.
Bottom line
Choosing a certified credit counselor with relevant experience gives you access to educational resources, budgeting tools and programs to help you build a solid financial future. Don’t rush into a credit counseling plan — take your time deciding whose financial advice to trust. Ask plenty of questions before committing to a program.
Article sources
- TransUnion, “ Consumers Turn to Credit Cards and Personal Loans to Manage the Financial Pressures of Inflation .” Accessed June 26, 2023.
