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Nonprofit Credit Counseling: What it is and How it Can Help

Credit counseling

When you hear the word “counseling,” you may think of discussing your emotional or mental issues with a trained professional, or of confiding in a therapist. You can think of nonprofit credit counseling in a similar way. If you are struggling with debt or trying to better manage your income and expenses, a credit counselor can provide guidance and help. A credit counselor is like a therapist for your money. His or her goal is usually to help you get control of your finances so that you can live a better life.

What a Counselor Can Do

What a credit counselor does depends on your specific situation. Since nonprofit credit counseling agencies don’t aim to make money off your problems, you can rest assured that the advice your counselor gives you is in your best interest, not in the interest of the ageny’s bottom line. A counselor might help you develop a budget so that you are able to live within your means and see where you money is going each month. Counseling can also help you set and reach financial goals, such as saving for an emergency or starting a retirement fund. If you are struggling with debt, a counselor will work with you to come up with a plan for paying off your loans. Counseling can take place in person, and many agencies also offer sessions over the phone.

When it Can Help

Credit counseling can take many forms. If your main issue is consumer debt, a counselor might help you create a debt management plan to help you pay down your credit cards. If you are considering filing for bankruptcy, you need to complete credit counseling before you can file for either Chapter 7 or Chapter 13. Credit counseling can also be useful if you are having difficulty paying for your mortgage or if you have a considerable amount in student loans and are struggling to pay them.

Tips for Choosing a Counselor

There are several things to look for and a few red flags to avoid when looking for a credit counselor. Although nonprofit doesn’t necessarily mean that the services offered are free, many counseling agencies will work with you if you can’t afford the rates. If an agency won’t give you any information or assistance until you pay, it’s in your best interest to look for another company.

Check out the agency’s credentials before deciding to work with them. A reputable company will have a good rating from the Better Business Bureau or similar agencies and will only employ certified counselors. You might also want to review the services offered by the counseling agency to determine if they are in line with your needs.

Confidentiality is also a big concern when picking a credit counselor. You want to work with a company that will respect your privacy and keep any information it has on you under wraps.

Most importantly, a nonprofit credit counseling agency should be working for you. An agency that has your interests at heart and that isn’t out to make money off of your pain is an agency you want to work with.

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