If you are having trouble managing your debt, feeling overwhelmed by bills, living paycheck to paycheck or trying to avoid bankruptcy, credit counseling might help you get your finances under control.
A good credit counselor can help you figure out a budget, develop a debt management plan, figure out the root causes of your debt, and offer sound advice on how to manage your money. You can meet with a credit counselor over the phone, online or in person, depending on the services you seek.
"When someone meets with a certified credit counselor, they get expert advice for overcoming their most urgent financial challenges," says Bruce McClary at the National Foundation for Credit Counseling (NFCC). "Consumers benefit from a comprehensive review of their entire financial situation. Every counseling session is completely confidential with advice that is uniquely designed for each individual."
You'll want to find a qualified credit counselor who will have your best interests at heart. Follow the steps below to find a credit counselor that's right for you.
1. Identify the Areas Where You Need Help
Before you start searching for a credit counselor, take some time to write down the biggest challenges you need help with. Whether it's paying down debt, avoiding interest charges or developing a budget, have an idea of what your goals are. Even if your situation seems overwhelming, it will be helpful to articulate beforehand what your needs are.
2. Start With a Reputable Credit Counseling Organization
It can be tempting to just start searching for credit counselors through Google, but you'll be better off if you use the search tools offered by reputable organizations that can help you find a credit counselor. There are several places you can start:
- The National Foundation for Credit Counseling: The NFCC is the nation's largest and longest-serving nonprofit financial counseling organization. It can help connect you with reputable, certified credit counselors. You can schedule an appointment online or start by calling their toll-free number.
- The U.S. Trustee Program: Offered through the U.S. Department of Justice, this program features a search tool that helps consumers find a credit counselor. You can search by state, and the agencies listed have all been vetted by the program. Most are focused on bankruptcy.
- Your state's attorney general's office or local consumer protection agency: This varies by state, but these sources may have recommendations for credit counselors in your area.
Make Sure Your Counselor Is Certified
Once you find a counselor through one of the portals listed above, you'll want to ensure that the counselor is certified. There are several agencies that certify credit counselors using stringent standards: the NFCC, the Financial Counseling Association of America and the Council on Accreditation, which focuses on general social service organizations that help consumers.
Start by reviewing the counselor on your own to find out if they hold any of these certifications, but be sure to ask them directly for their credentials as well. And don't be afraid to check out a few different counselors before settling on one. You'll want to make sure you have the right fit.
Set Up a Preliminary Meeting
Once you've identified a few counselors, call to set up a preliminary meeting in person or over the phone. This initial session should always be free. During the meeting, interview the counselors about their experience, approach and cost structure.
Depending on the types of services you'll need, your sessions could be free if they're basic, or they could cost a small fee. You'll want to stay away from for-profit companies, especially ones that offer quick fixes. Most credit counselors work at nonprofit agencies, but depending on the time they will spend with you, they might charge a small fee, which is normal. Be sure to get a quote in writing, and find out whether it's per session, on a monthly basis or some other structure.
Ask a lot of questions about the process. If you feel uncomfortable with the counselor or are unclear about how things work, don't hesitate to ask more questions. It's OK to move to another counselor if one doesn't seem like a good fit. Don't rush the process—it's perfectly fine to take a reasonable amount of time to find the right counselor for you.