Credit counseling is a process that aims to educate you about your financial options. This might include helping you construct a better budget, enroll in a debt payment plan, or just learn financial basics.
Your credit can also benefit through the creation of a financial strategy from credit counseling services. Some, but not all services are offered for free. There are a few things to know when selecting the best credit counseling agency for your situation. This guide will help you discover what you need to know and provide you with a few of the best agencies to choose from.
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Is Credit Counseling Right for Me?
A common misconception about credit counseling is that it is only for those who are in poor financial standing and looking to pay off credit card debt fast, or it’s for people who want to create a debt management plan.
While credit counseling is an effective service for getting your finances back in order, in truth, credit counseling services are a good resource for anyone. Credit counseling services can help those who are looking to create a financial strategy or would like assistance and advice to plan and meet their financial goals.
A credit counselor can assist you with creating a budget, understanding credit, finding ways to save money, and being proactive about your financial situation.
Selecting a Credit Counseling Agency
A good credit counseling agency can provide advice on managing your money and your debts. Typically, before you provide any personal information, a reputable counseling service will provide you with information about themselves and the services they provide.
Any credit counseling service that asks for your personal information before providing you with theirs could be a scam. Be sure to check any agency you intend to work with with your state attorney general and state consumer protection office. According to the Federal Trade Commission, reputable credit counselors should offer educational information for free and many have free initial meetings. What’s more, they advise that any organization that will not help you unless you pay should be avoided.
Nonprofit Credit Counseling
Most legitimate credit counseling agencies are nonprofits. However, this doesn’t mean that they are completely cost-free, only that they don’t intend to make a profit from their proceeds. A few nonprofit choices include:
- The National Federation for Credit Counseling (NFCC) is the oldest nonprofit dedicated to credit counseling, and they certify other organizations as well. They don’t turn people away, and have locations throughout the nation.
- GreenPath Financial Wellness has free educational materials, including games, calculators, and webinars.
- Credit.org is certified by the NFCC and offers fully online courses for free.
Governmental Credit Counseling
While a nonprofit will often guide you through the process, free government resources may take a more hands-off approach. If you have a general idea of what you need and simply want informational resources, it might be a better idea to turn to some government finance education.
- The Federal Trade Commission has several free publications dealing with financial literacy, in English and Spanish.
- You can use your state attorney general’s website for more than just verifying nonprofits. Check to see if they have links to free financial resources, just like Idaho does.
- Furthermore, during the first full week of March, you can participate in National Consumer Protection Week. Many community organizations and local councils hold events during that time to better educate citizens.
There are plenty of other free financial resources besides nonprofits and governmental agencies. While many of these free resources provide only the best advice, there is nothing to certify their opinion.
Such options may be great if you want some background knowledge to make an informed decision, but don’t put your faith in anyone without knowing their qualifications and certifications.
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