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Free Consumer Credit Counseling

how can free consumer credit counseling help me

Looking for Free Consumer Credit Counseling? You may have heard that it can help you eliminate your debt problem, but do you know where to start and what to look for when evaluating a credit counseling agency? Our handy guide will help you learn what credit counseling is, how it can help you and how to evaluate an agency.

What is free consumer credit counseling?

If you are struggling with debt, there are a lot of options available to you for debt relief. Credit counseling is one of those options. But before you can make a decision about whether it’s the right choice for your situation, it’s important to know what credit counseling IS! We’ve written a great guide called “How Does Credit Counseling Work?” Below are some highlights to help you better understand the process at a glance.

  •  Credit counseling will help you learn how to manage your money more effectively
  •  You should be offered a free consultation to fully evaluate your financial situation before any recommendations about solutions are made
  •  Ongoing support and education should be offered as part of the process
  •  A free consultation can typically be conducted over the phone, online or in person with a local agency

How can free consumer credit counseling help me?

Depending on your situation, your credit counselor can make recommendations about the best way for you to tackle your debt. Some of the options they may give you include:

  • A debt management plan (DMP): In a DMP you would make one payment to your credit counseling agency and they make payments on your behalf to each creditor you enroll in the program. Typically through a DMP, creditors will offer benefits to consumers that may include reduced interest rates, lower payments and elimination of fees. With this program you have the confidence of knowing that your creditors are being paid every month on time and your balances are going down much quicker than if you continue to pay minimum-only payments at high interest rates on your own.
  • A self-management plan: If a debt management plan isn’t the right choice for you, your credit counselor should be able to provide you with tools and resources to help you eliminate debt on your own. They will help you create a budget to follow and provide you with a plan to address your debt. The ongoing support of a financial education curriculum, helpful financial calculators, videos, webinars, and other tools will help keep you on track.
  • Professional referrals: If your credit counselor doesn’t have a program that fits your needs, they can provide you with a professional referral to someone that can help you! If a solution such as bankruptcy is the best choice for you, they can help point you in the right direction and send you to someone qualified to assist you.

How do I find a Credit Counselor I can trust?

It’s important to be cautious when dealing with a topic as sensitive as your finances. While there are a LOT of people out there who can and will genuinely help you, there are scammers to watch out for as well. Here are a few guidelines to make sure you are dealing with the right agency:

  •  Look for a non-profit credit counselor. Non-profit doesn’t mean they will never charge you a fee for anything (they have to keep the lights on and pay their staff after all), but their fees should be manageable and fully compliant with all state and federal guidelines. The credit counselor you choose should be willing to disclose their fees to you up-front if you ask and provide you with as much information as you require to earn your trust!
  •  Check the Better Business Bureau  rating of any agency you are considering. If they have a track record of consumer complaints, chances are they aren’t the right fit for you!
  •  Make sure the counselors are licensed and trained to assist you.

We’ve created a comprehensive guide to evaluating the best credit counseling programs for a comprehensive look at what to watch for when speaking to an agency.

This is just some of the key information to check when looking for a free consumer credit counseling program. If you have any additional tips or questions for us, please share them in the comments below -- we would love to hear from you!

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