Key takeaways

  • Credit counseling could be a viable option if you’re struggling to repay your debt.
  • Debt management plans, bankruptcy counseling, student loan counseling and housing counseling are all popular credit counseling services.
  • Before working with a counseling service, try working directly with your lenders or creditors to resolve your debts.
  • You can request a settlement from your lenders if you can afford a lump sum payment, but this option can mean bad news for your credit health.

Credit card debt, student loans and mortgage payments can feel overwhelming, and you’re not alone if you fall behind on managing your debts. Credit counseling services may offer solutions to help you navigate your options and get back on track sooner rather than later. These companies can provide credit counselors to help you assess your financial situation and create a plan for getting your finances back in order.

If you’re considering a credit counseling service for debt management, it’s a good idea to research reputable options with upfront and transparent pricing, certified counselors and an excellent track record.

What is a credit counseling agency?

A credit counseling agency is (typically) a nonprofit organization that offers advice and counseling for those who need help managing debt. These companies help consumers create debt management plans and make decisions about housing costs, budgeting and overall money management. They may also offer counseling and guidance on bankruptcy, student loan management and other financial topics.

While counselors can help you with various financial issues, they often specialize in helping consumers craft specific plans for managing their debts. This might include negotiating lower interest rates, reduced fees and lower payments. You may have the option of making a single payment to the credit counseling organization each month while the agency handles payments to creditors, ensuring on-time payment.

Credit counselors with these agencies are usually certified and trained in specific areas of money management so that they can offer targeted advice and plans. You can meet with them in person, online or over the phone.

How to choose a credit counseling agency

As you’re making a choice between credit counseling services, you’ll want to look for a few important features:

  • Certified counselors: You can confirm if an agency is using certified credit counselors before signing up. Counselors with a reputable agency are likely certified in consumer credit, money and debt management, and budgeting.
  • Transparent fee schedule: One of the most essential aspects of choosing a consumer credit counseling agency is selecting one that offers complete transparency regarding fees. Even though credit counseling agencies fall under nonprofit status, it’s not uncommon to find them charging hefty fees, so finding a reputable option with upfront pricing is key.
  • No personal information up front: The Consumer Financial Protection Bureau also warns consumers should be able to get free information from a credit counseling service without first having to provide personal information. If an agency insists on personal information up front, it’s a red flag.

Several resources can help you find approved and reputable credit counseling services, including your state attorney general’s office and consumer protection agency. You can also search for a list of approved credit counseling agencies through the Department of Justice.

The Financial Counseling Association of America and the National Foundation for Credit Counseling also offer directories for finding reputable agencies.

You can also look for a credit counselor through a credit repair company.

Highly rated credit counseling agencies

If you’re considering working with a credit counseling agency, here are a few of the top reputable options to explore.

Cambridge Credit Counseling Corp.

Cambridge Credit Counseling was established in 1996 and offers a free initial consultation, a wide variety of services and financial literacy tools. Cambridge Credit Counseling offers services such as:

  • Bankruptcy counseling
  • Credit counseling
  • Debt management plans
  • Debt consolidation programs
  • Housing counseling and foreclosure prevention
  • Student loan counseling

Cambridge Credit Counseling operates as a 501(c)(3) nonprofit agency. It’s a HUD-Approved Housing Counseling Agency and a member of the Financial Counseling Association of America (FCAA) and the National Foundation for Credit Counselors (NFCC). Cambridge also employs third-party certified counselors who undergo extensive training and continuing education throughout their tenure.

Cambridge Credit Counseling provides a dashboard where you can track the payments made on your behalf (if you’re working under a debt management plan) and other valuable information.

Fees for Cambridge Credit Counseling’s services depend on your state, but the initial and monthly fees are capped at $75 and $50 each. The average monthly fee is $30.

Consolidated Credit Solutions

Operating as a 501(c)(3) nonprofit since 1994, Consolidated Credit Solutions has helped over 10 million people get out of debt. The agency offers a wide range of options for managing debt and other financial matters. It provides tools for personal finance, such as budgeting, money management, cutting spending, and establishing savings.

Consolidated Credit Solutions also offers multiple services involving debt and debt management. It offers guidance on debt consolidation loans, balance transfers,  bankruptcy, debt settlement and debt management. The agency also offers digital tools such as an extensive library of online financial resources and an app for iPhone and Android users, where you can monitor your debt management program.

Consolidated Credit is a member of the FCAA and a HUD-Approved Housing Counseling Agency, plus all counselors are certified personal financial counselors. No matter which path you’re considering for debt management, you can start the process with a free initial consultation.

GreenPath Financial Wellness

GreenPath Financial Wellness has over six decades of experience with credit counseling. Hundreds of credit unions, banks and employers partner with GreenPath, and it is available in all 50 states. It offers an extensive list of debt counseling services, including debt management solutions and payoff plans. You can work with one of its NFCC-certified counselors for guidance on credit, student loan or housing services.

GreenPath Financial Wellness doesn’t charge fees for counseling sessions, which last about an hour each. If you choose to move forward with a personalized debt management plan, you’ll be responsible for a one-time enrollment fee of $35 and a $28 monthly fee. You can cancel the program at any time.

Money Management International

Money Management International, or MMI, operates as a nonprofit organization and has worked with over 2.5 million individuals or families and helped clients repay $10 billion in debt. MMI offers a wide range of financial services, including:

  • Bankruptcy counseling
  • Credit counseling
  • Credit report reviews
  • Foreclosure counseling
  • Homebuyer counseling
  • Reverse mortgage counseling
  • Student loan counseling

MMI also stands out for its disaster recovery counseling. Through its Project Porchlight initiative, MMI works with individuals who live in a place where a federal- or state-declared disaster has taken place and offers a recovery plan through the use of a certified counselor.

MMI offers free counseling sessions, but you will have an additional charge if you use a debt management plan. It also offers 24/7 counseling access, or you can get started sooner with its online chatbot. MMI is HUD-certified and a member of FCAA and NFCC.

Steps to take before seeking credit counseling

In some situations, working with a debt management plan and credit counseling service can help you get out of debt faster. However, it’s also a good idea to consider steps you can take first that may help you avoid additional fees or an impact on your credit:

  • Contact your creditors directly: You don’t have to use a credit counseling service to call and negotiate rates with your creditors. You can contact a creditor directly and ask for a reduction in interest rates, a change in your minimum payment or due date, or a short-term modified payment plan.
  • Look for balance transfer alternatives: You may be able to transfer a balance to another loan or credit card with a lower (or zero percent) interest rate or lower minimum payment. This may help you reset until you can make larger monthly payments.

How to protect your finances when using a credit counseling service

If you decide to move forward with a credit counseling service, you can take steps to ensure you select a legitimate, reputable agency. The FTC suggests you inquire about an agency’s licensure status, the qualifications of its counselors and its services. Avoid any agency that promises to fix all your financial woes or requires you to pay money upfront before starting counseling.

You can also ask about the fee structure and what measures the agency uses to ensure your information remains secure and out of the hands of scammers or identity thieves. Inquire about employee compensation and whether or not the counselors earn more if you sign up for certain services (a definite red flag).

The bottom line

If you’re overwhelmed with your finances and debt management, then turning to a legitimate credit counseling service may help you make a plan and get back on track. Before you sign up, explore legitimate companies like the ones featured here. Look for credit counselors who are members of reputable organizations, such as the FCAA or NFCC. It’s also best to work with an agency offering transparent pricing and only using certified counselors.