While financial issues have troubled households and individuals for decades, in recent years this problem has been exacerbated by the global financial crisis coupled with the recession, employment issues, and soaring living costs. As a result, more people have found themselves in a position where they’re struggling to keep up with bills and simultaneously manage debt. For situations where managing debt is of the utmost importance, credit counseling is often sought.
Credit counseling services are comprised of financial professionals who deal with managing personal finances on a daily basis. With help from a professional credit counseling agency, you can get the advice and assistance you need to get back on track. Bear in mind that not all companies are reputable or deliver the results they claim. Please note they’re different to credit repair services which aim to remove negative information from your credit report.
- 1 Top 5 Credit Counseling Agencies
- 2 Credit Counseling: What to Consider
- 3 Review Recap
- 4 Credit Counseling FAQs
- 5 5 Signs You Need Credit Counseling
Top 5 Credit Counseling Agencies
1. InCharge Debt Solutions
This nonprofit organization is in Orlando, Fl. The organization provides clients with free services on the phone or online. The consultations are between 20 and 40 minutes. They offer resources such as a blog, eBooks, an app, and a personal finance calculator. The company provides credit counseling, housing counseling, and bankruptcy counseling services. This organization offers free financial literacy workshops and webinars. As a Housing and Urban Development provider, the organization offers housing counseling, foreclosing prevention and homebuying education. They offer a free 7-week workshop to Habitat for Humanity home recipients before moving into their homes.
Official website: https://www.incharge.org/
2. Money Management International
The founders established this HUD-approved nonprofit organization in 1997. It is a combination of 6 credit counseling organizations that had decades of experience. This organization provides free consultations to clients by phone, online, or in the office that lasts approximately 45 to 60 minutes. Their clients receive bankruptcy education if they are considering bankruptcy. Counselors offer foreclosure assistance to individuals concerning their mortgage payments. Home buying counseling is offered to future homeowners. Clients receive credit report reviews. Reverse mortgage counseling is offered to help individuals learn about the benefits and issues that may occur with this loan.
Official website: https://www.moneymanagement.org/
3. GreenPath Financial Wellness
This nonprofit organization is in Farmington Hills, MI. Residents throughout the entire United States can receive financial counseling from this organization by phone or online. Customers receive free one-hour consultations by phone from this nonprofit organization. The organization has counselors on staff to assist with debt counseling, debt management, bankruptcy support, student loan counseling, credit report review, and a simple payment plan. The simple payment plan uses an online service EarnUp to help repay loans faster. They combine this service with the counseling service to help their clients determine the payment options that are best for them.
Official website: https://www.greenpath.com/
4. Cambridge Credit
Founded in 1996, the company is in Agawam, MA. This nonprofit organization offers free credit counseling services by phone. The company has certified counselors to assist clients that have an average of 14 years of experience. The Association for Financial Counseling and Planning Education certified this organization’s financial counselors. The services offered to clients include the following.
- Credit counseling
- Debt consolidation
- Debt management plans
- Housing counseling
- Foreclosure intervention
- First time home buyer courses
- Reverse mortgage counseling
- Student loan counseling
- Bankruptcy counseling services approved by the Department of Justice
- A Financial literacy portal
- Financial literacy downloads
- HUD-approved housing counseling services
Official website: https://www.cambridge-credit.org/
5. Consolidated Credit
Founded in 1993, this Fort Lauderdale, Florida based nonprofit organization hosts or participates in 300 events annually. Financial counselors provide free webinars monthly on financial topics. The organization believes in educating people on how they can stay debt-free after they have completed the debt management program. This organization has helped 10 million people get relief from credit card debt. Clients receive 30-60 minute free consultations. They provide free housing counseling from their HUD-approved staff. Individuals can take a paid first time home buyer course for $99 that is HUD-approved. Online resources are available on budgeting and financial literacy.
Official website: https://www.consolidatedcredit.org/
Credit Counseling: What to Consider
Choosing the right debt and credit counseling service is extremely important if you want to get expert assistance to help ease the financial strain. Some of the factors to consider when you are looking for suitable credit counseling include:
- Whether the agency is a non-profit agency or a for-profit one
- The variety of solutions that the agency offers
- Whether the agency is accredited by industry bodies
- Whether the agency has reviews from past customers
- What the setup and maintenance fees are
- What the agency’s BBB ranking is
- What sort of support the agency offers
When it comes to something as vital as your personal finances, you need to make sure you choose the right company for assistance. Avoid dishonest groups and find highly reputable credit counseling that can provide you with invaluable knowledge, resources, and advice from experienced experts.
Credit Counseling FAQs
What is credit counseling?
Credit counseling is a service that aims to educate consumers on how to effectively manage their finances including outstanding debt. A certified debt counselor will work side-by-side with you to establish a debt management plan and a budget in order to regain your financial footing. When you enroll with a credit counselor, the first thing they’ll do is take a hard look at your credit reports, history, and your income versus expenses. By knowing where you stand financially, they’ll be better equipped to help you eliminate debt once and for all. After reviewing your current and past accounts, a credit counselor will structure a repayment plan you can successfully stick to. Prior to enrolling with a credit counseling agency, check the company’s reputation and Better Business Bureau rating. Enrollment and monthly maintenance fees may apply.
What are the benefits of credit counseling?
Credit counseling has a number of benefits. A debt management plan can help you stay on track of your spending, consolidate your debt into a more feasible payment, and provide you with the necessary education to not repeat the same errors. Moreover, a credit counseling agency can work as an intermediary between your and creditors to lower interest rates, end late payments, and even reconfigure any delinquent accounts you may be carrying. As an example, some creditors will immediately lower your interest rates after seeing a debt management plan from the counseling agency. Conversely, others may require you to make three consecutive payments towards your account before considering an interest rate deduction.
What types of debt qualify for a debt management program?
Typically, debt management programs are restricted to unsecured debts. Unsecured debts include department store cards, credit cards, utility bills, medical bills, and loans not tied to any underlying assets. Secured debt, on the other hand, is backed by collateral meaning that if the borrower defaults on payment, the lender may take ownership of the asset. A debt management program can be a great way to get a handle on your finances, establish a feasible budget, and simultaneously work towards paying your creditors. Consult a debt management agency for more details on the programs available and the service they can offer you.
5 Signs You Need Credit Counseling
Sometimes it helps to receive a fresh perspective on your finances. This is where consumer credit counseling can come in handy. These agencies employ financial professionals that have a wealth of experience in helping you find solutions to your monetary goals and problems. With this in mind, here are five occasions where you may need the services of a consumer credit counselor.
You Are Preparing a Household Budget
If you don’t have much experience in developing budgets, it’s a good idea to seek assistance; this is where a consumer credit counseling service can help you. They will sit down with you to prepare a financial plan. As part of this plan, they can help you find ways to save more money and pay down debt quicker. In addition, after setting up your plan you can meet with them regularly to ensure you are meeting your goals and if for some reason you are not, they can help you make adjustments to your budget.
You Are Past Due on Bills
If you find yourself falling behind on credit payments or even utility bills, a credit counselor can help you. Most offer a debt management plan where they will work on your behalf to consult with your creditors. Often, these certified professionals negotiate with lenders to lower interest rates, refund some late fees and settle on a monthly payment amount based on your budget. Once you enroll in this plan, you make a payment to the counseling agency and they disburse your payment to your creditors for you. It’s important to note that you may have to pay a small monthly fee to enroll in this plan, but when you factor this in with what you could save in lower interest rates, it’s well worth it.
You Are Planning to Buy a Home
When you are ready to buy your first home, it’s important to become educated on the buying process. Many credit-counseling agencies offer first time home buyer sessions where they will explain in detail the step-by-step process of buying a home, which includes everything from how much you can afford monthly on your mortgage to home inspections.
You Are Behind on Your Mortgage
If you are a homeowner and are struggling to make your monthly mortgage payments, credit counseling can assist you. They do this by learning more about your situation to determine what the best course of action may be. Along the way, you’ll discover ways to save more money in your budget, which may help you make up the delinquency. In certain cases, they will work with your lender to try to devise a plan to help you catch up.
You Are Considering a Reverse Mortgage
Reverse mortgages have grown in popularity as of late, but they can be difficult to understand. If you are thinking of doing one it is best to consult with a credit counselor first. They can help you learn more about what a reverse mortgage encompasses, what fees they entail and how it fits into your finances. Armed with this information, you can determine whether this is the best course of action for you.
Matt is the founder of CreditInformative.com and holds a Bachelor of Commerce (BCom) with a major in Finance and Marketing and a Bachelor of Arts (BA) with a major in Economics and History. Matt’s advice has been featured on Business Insider, Fox Business, Newsday, Money Under 30 and many other publications.