We’ve all heard the quote, “money makes the world go round.” For all of us, knowing how to organize our money is crucial: our housing, food, and recreation depend on it. Yet, with all the different bank accounts, savings plans, and credit counseling agencies, it can be challenging to know who to trust with your finances.
Credit counseling agencies help you organize your finances. They assist with budgets, debt management, and advice on how to save and spend your money. We’ve investigated and reviewed some of the most popular agencies so that you don’t have to worry about which agencies you can trust.
Whatever your income, education, or employment status, we have some great credit counseling agency recommendations for you.
What Happens in a Credit Counseling Session?
In a credit counseling session, you will meet with a specialist financial advisor. The consultant will go over your income, outcome, and budgets with you. This consultation is to make sure that you’re not spending more than you can afford. The counselor will also often give you financial advice and help you come up with a fiscal plan.
If you have debts, they will discuss ways to pay them off more efficiently. They even can help provide extra information in specialized areas like reverse mortgages or bankruptcy counseling.
Your counselor will likely recommend paths of actions like a debt management plan. However, as the client, you are not under any obligation to agree to this.
Accreditations to Look for When Comparing Credit Counseling Agencies
One of the best ways to know a credit counseling agency is reliable is to check for its accreditations. We’ve included them in the reviews, so here’s a quick guide to what they can tell you.
FCAA: The Financial Counseling Association of America is a group of consumer credit counseling services. For consumer credit agencies to be part of the FCAA, they must agree to adhere to its high professional conduct standards.
Nonprofit: This designation means that the credit counseling agency is not looking to make more money than is necessary for operating. Nonprofits serve to help people rather than make money. Usually, these organizations offer either free or less costly services than agencies trying to rake in substantial profits.
ISO 9001: ISO 9001 is a collection of management principles. If an organization is ISO 9001-certified, it indicates a well-organized business focusing on equality and professionalism.
NFCC: The NFCC is the National Foundation for Credit Counseling.To join the NFCC, an agency must meet four requirements:
- Provide financial counseling per state and federal laws
- Comply with NFCC member standards, like unbiased guidance
- Register as a 501 (c)(3) nonprofit
- Hold accreditation by the Council on Accreditation (COA)
COA: The Council on Accreditation accredits well-established organizations. It has several branches, including financial education and counseling services. This broach reach means that the consumer credit counseling services they accredit are trustworthy.
HUD Approved: HUD is an acronym for the Department of Housing and Urban Development. An accreditation from the HUD means the organization has reviewed the credit counseling agency and considers it reliable.
BBB: BBB stands for Better Business Bureau. BBB accredits companies if they are trustworthy and provide high-quality services. This assessment covers areas like the protection of data and accurate advertising.
Aid That Consumer Credit Counseling Services Can Provide
Consumer credit counseling services encompass a wide range of services and advisory. Anything that potentially impacts the consumer’s credit falls within this range.
Debt Management: A debt management plan is an agreement between you and your creditors. It addresses how and when you are going to pay back your debt. Consumer credit counseling services can advise you on maximizing the benefits for you when negotiating these plans. Also, they help you to understand and stick to an agreement.
Debt Settlement: Debt settlement is a situation where a creditor forgives a portion of your debt in return for repayment of the remainder. The downside is that this can impact your credit score. Credit counseling agencies can advise you on whether this would be a good option. With a consultant, you can understand the risks and benefits.
Student Loan Advice: Understanding the various types and sizes of student loans can be hugely daunting. Credit counseling agencies can help you or your child in this matter. They will explain the different kinds of loans, compare interest levels, and find the best package for you. Also, they can help with repayment plans.
Foreclosure Intervention: Foreclosure intervention is a process of finding alternatives to foreclosure. Instead of immediately going to foreclosure, lenders and eligible homeowners can discuss other options. For example, possible options might include a short sale or loan modification. Consumer credit counseling services can advise you on whether you’re eligible for this. If you are, they can help to negotiate and keep to any agreements made.
Reverse Mortgage Counseling: Consumer credit counseling services can help you decide whether a reverse mortgage is right for you. Reverse mortgages occur when homeowners choose to convert part of the equity on their home to money. They are a form of a loan. Credit agencies can explain the benefits and drawbacks of your specific situation and what the costs and tax implications could be.
Credit Report Review: Credit reports show lenders whether you’re a reliable person to lend money to or not. These reviews affect your access to things like mortgages. In a credit report review, you can learn more about your credit report and how this affects you.
Housing Advice: If you’re looking for housing advice, it’s crucial to pick an agency approved by HUD. They can help to educate you about mortgage options and how to choose a property in your budget. They can also offer advice on financial management after you’ve bought a property.
Bankruptcy Counseling: The US federal government requires two credit counseling sessions if you want to file for bankruptcy. The first is pre-filing counseling to start the process. The second is pre-discharge counseling before debt forgiveness. These sessions give you information and guidance on how to manage your finances in the future.
Credit Coaching Sessions: Not in immediate financial difficulty but still want some help? Credit coaching sessions are an option for you. In these sessions, you will get personalized advice on how to budget and stay financially secure. These coaches help you to avoid future money problems.
Credit Counseling Agencies Reviewed
We have reviewed seven established Credit Counseling companies for you. Although this gives you some background information, make sure you check them out yourselves. You want to see which is more appropriate for your concern.
Accreditations: HUD Approved, ISO 9001, nonprofit, FCAA
Best for: Proven results. Its website states that the average debt repayment is 48 months or less. Clients working with them have seen average credit card interest rates reduced from 22% to 8%.
Downsides: Some customers have found their advice to be confusing. As a result, they have accidentally made late payments. Make sure you’re completely clear on what you need to do — don’t be afraid to ask ‘stupid’ questions.
Extras: Cambridge Credit Counselors have an average of 14 years’ tenure for the company. You’ll likely be speaking to someone who has a lot of experience helping people.
Accreditations: BBB accreditation (A+), ISO 9001, nonprofit,
Cost: A set-up fee of $40 and a monthly account fee of $30.
Best for: Online presence. Family Credit Management allows you 24/7 access to your accounts online. It’s an improvement from many competing services, which are phone only.
Downsides: Family Credit Management are not always responsive to complaints.
Extras: Provides a free guide on ways you can protect your finances during Covid-19.
Accreditations: COA, nonprofit, HUD Approved, NFCC
Best for: Versatility. GreenPath provides a vast range of services. It covers debt management, foreclosure prevention, homebuyer counseling, and bankruptcy support.
Downsides: Some users have complained that GreenPath makes it difficult to communicate over the phone.
Extras: GreenPath has a blog where you can read informative articles and listen to recorded webinars. It covers a range of topics, such as Options for Dealing with Debt.
Accreditations: NFCC, nonprofit, COA, HUD Approved
Best for: Education. InCharge has a range of resources, including financial advisory workshops and information for teachers. This credit counseling agency is an excellent place to learn more about managing money without a commitment.
Downsides: The company does not have a money-back guarantee. If you’re unlucky, you risk losing out.
Extras: InCharge Debt Solution’s website has a sliding scale. You can input how much debt you have and see quick options without scheduling a one-on one-appointment.
Accreditations: None listed; NOT BBB-approved.
Cost: Free consultation, after that, a monthly fee. The price varies according to the number of services you use.
Best for: Understanding. The founder, Bernie Dancel, had to file for bankruptcy in his twenties. The experience prompted him to found the agency. CareOne’s mission is to help people struggling with money.
Downsides: Mixed reviews about CareOne. Several customers have said that they ended up saving little or no money.
Extras: The website advertises a six-month money-back guarantee on any services, support, and benefits you received.
Accreditations: HUD Approved, nonprofit, ISO 9001, FCAA
Best for: Compassion. Consolidated Credit has partnered with over 500 organizations. They help provide financial education to underrepresented communities.
Downsides: They don’t let you check your progress via email. Instead, you have to communicate over the phone.
Extras: Consolidated Credit also has a Spanish site. Spanish speakers can get detailed and easily understandable help and information.
Accreditations: NFCC, HUD Approved, nonprofit, COA
Cost: Free (basic services)
Best for: In-person appointments. With offices in 29 states, this is one of the few credit agencies where in-person meetings are often possible.
Downsides: Some services, such as self-guided or personalized student loan counseling, cost extra.
Extras: If you’re struggling due to a natural disaster, Money Management International has a specialized team. They will help you understand your rights, responsibilities, and recovery options.
Other Ways to Find a Credit Counseling Agency
Besides these reviewed options, there are other simple ways to find consumer credit counseling services in your state or local area. You can search through either:
- The National Foundation for Credit Counseling (NFCC)
- The National Association of Certified Credit Counselors (NACCC)
Both of these websites allow you to input information like your zip code and issue. The database will connect you with a service personalized to you.
Questions to Ask a Consumer Credit Counseling Service
Will this service affect my credit score?
Visiting consumer credit counseling services does not directly affect your credit score. As long as you keep to any agreed payments, there should be no effect. Sometimes, a note that you have used a credit counseling agency is will show up in your credit report.
If you fail to keep up with the payments, it can negatively affect your score. Make sure to talk through your options with a professional before you commit to anything.
Do I need a debt management plan?
Even if you have debts, there are often several possible options to repay them. Make sure that you know all of your options before committing to any contracts or agreements. If you choose a debt management plan, make sure you know if any of your debts aren’t included in the agreement as you will have to continue paying them separately. If you need more information on debt, the US government website provides high-quality and unbiased information.
Do you provide free education?
Most of the resources that consumer credit counseling services provide are more effective if you’re also budgeting and managing your money correctly. Make sure that your credit counseling agency has resources for this. Look for personal help from your counselor, a blog, or other types of education.
Will you provide all contracts and changes in writing?
Make sure that the answer to this is yes before committing to any consumer credit counseling services. Save copies of every document you sign. Also, make sure you read the small print of every form before agreeing to anything.
Although credit counselors are overwhelmingly helpful, it’s crucial to make sure that you understand the terms of your agreement. You also want to make sure you’ve not overlooked any hidden fees or clauses.
What qualifications does my counselor have?
It’s vital to check that your financial advisor has sound education and experience. Your counselor should also have approval from a professional board like the National Foundation for Credit Counseling (NFCC) or the National Association of Certified Credit Counselors (NACCC).
Is there employee compensation?
At some consumer credit counseling services, employees make more money if they sell certain products. If this is the case, the advisor might encourage you to spend money on a service you don’t need. Make sure you know if this is the case so you can make the best choices for you.
What accreditations does the company have?
As a general rule, the more accreditations and endorsements a consumer Credit Counseling service has, the more reliable it will be.
The accreditations mentioned at the top of this article are some of the most critical ones. Not having some of these accreditations doesn’t necessarily mean that a company is inherently unreliable. However, it’s worth trying to work out why.
For example, suppose an agency never or infrequently deals with housing-related finance. HUD accreditation would be unimportant to their business. As such, there’s nothing wrong with not having the certification, and it is not an indication there’s anything wrong with them.
How can I contact Credit Counseling providers?
Ensure that you can contact the organization in your preferred way by phone, email, online, or in person. This contact method may have changed since the last website update, so ask directly.
What are your fees?
Unlike credit repair services, most consumer Credit Counseling services are nonprofits. However, not all are, and some even have fees. These can be either a one-off payment to get started or monthly fees. Make sure you know what you’ll be paying, and make sure it’s worth the price.
Many agencies also provide a first free consultation so that you can find out your options. It’s a good idea to try some out to see which credit counseling agency offers the best advice and options for your situation.
Now that you understand more about consumer credit counseling services, you’re ready to find the agency that works for you.
It’s always best to check the reviews of any company you choose to make sure that customers in the past have had positive experiences. You can get rid of your debt, improve your fiscal literacy, and become more financially stable. Don’t be afraid to ask questions and seek secondary advice, and you’ll be doing better in no time.
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