Financial strain can lead to major life issues. Whether you’re struggling with debt or have poor credit, the money moves you make can have a serious impact on the rest of your life.
If your debt, credit, or other financial issues are weighing you down, you have relief options. It’s important, however, to make sure you pick the best possible option for you. There are expensive options like financial planning, but that doesn’t make sense for someone already struggling. That’s why we recommend non-profit credit counseling. It’s not a panacea for your money problems, but it’s an inexpensive, effective way to help get you on the right track.
If you’re in a pinch and need help, here’s what non-profit credit counseling can do for you.
Services and Counseling Available
Credit counseling offers a number of useful services, available for all types of financial needs.
- General credit counseling: If you don’t have a specific problem you need to be addressed, you can still meet with a counselor. You’ll share some basic financial info with your counselor, and they’ll help you review and plan for your future goals.
- Bankruptcy counseling: Bankruptcy is a complicated and damaging financial process. If you’re considering filing for bankruptcy, you can set up a counseling session to weigh the pros, cons, and future ramifications.
- Student loan counseling: You and your counselor will analyze your current repayment plan and, if necessary, adjust your plan or consolidate your debt. Student loans can mean lots of debt for young adults, so consulting a pro is a good idea.
- Debt management: Debt can be overwhelming because the further you fall behind on payments, the more you owe. If you’re struggling, debt management counseling can help you weigh your relief options and start erasing your debt. No two debt management plans are exactly the same, but this could entail consolidating your debt and lowering your interest rates. Typically, your counselor will collect from you and make your payments, and management plans last a few years. This is arguably the most common service provided by non-profit counselors.
- Homeownership counseling: Open to first-time buyers and longtime owners alike, homeownership counseling can help you navigate the financial perils of owning your own place. Counseling can help you plan to buy a home or even prevent foreclosure.
Credit counseling companies typically offer these core services, give or take a few depending on the brand.
Non-Profit vs. For-Profit Credit Counseling
On the flip side of non-profit credit counseling, there are companies that do the same thing, only for profit. While we aren’t here to criticize for-profit counseling, we prefer to recommend the non-profit alternative. First and foremost, non-profit credit counseling is free or very inexpensive, so it makes more sense for people who need financial help than it’s often expensive counterpart.
Generally speaking, well-respected non-profit companies will provide the same quality of service as for-profit ones, and their priority is to help you with your finances, not improve their own. For-profit credit counselors may have something to gain by pushing you toward one financial solution or another, but that won’t be the case with non-profit counseling.
Moreover, non-profit counseling agencies tend to focus more on financial literacy and long-term problem-solving. On the other hand, for-profit companies often lean into fixing your immediate problem without providing you the tools to stay financially afloat.
The Benefits of Credit Counseling
While we’ve broadly discussed how credit counseling can help you, we haven’t gotten into the details. The general impacts are pretty clear from the counseling options available. Overall, the greatest benefit of non-profit credit counseling is the ability to take better control of your finances. Whether you need specific planning or general advice, meeting with a credit counselor can and should bring you closer to financial security and education.
Those benefits are long-lasting. These highly-trained counselors will not only help you manage your debt load or credit, but can also instill budgeting and spending techniques that will help you avoid falling back into debt.
You won’t just gain intangibles though. Materially, credit counseling can also help your credit score. While there’s no guarantee your score will rise, taking advice from your counselor or completing a debt management plan successfully can often lead to a better score.
As mentioned above, non-profit credit counseling is free, however, some strategies like debt management plans will charge fees. Still, the cost is minimal compared to the potential reward.
Choosing a Counseling Agency
Regardless of your specific needs, the quality of the counseling agency you choose can make all the difference in the service you receive. If you know what to look for, you can easily sort out the good from the bad.
Any agency worth your time will be a registered 501(c)(3) non-profit organization, and should at least have an accreditation from the Council on Accreditation. In addition, most reputable non-profit counseling services will be a member of either the National Foundation for Credit Counseling or the Financial Counseling Association of America. You should ask about accreditations and counselor licenses when getting started, as well as details on services provided and fees. The U.S. Federal Trade Commission has a helpful checklist of things to consider before choosing an agency.
A great starting point when searching for a counseling agency is the NFCC. While the foundation offers free initial counseling, it will also work to connect you with an accredited non-profit near you that works with your needs.
The NFCC has testimonials on its website, highlighting a few of the millions of Americans it has helped since 2016. Many testimonials not only talk about the results of the counseling, but how friendly and helpful the process was along the way.
“I talked to several credit management companies who made me feel like a statistic, not a human being. Take Charge America, an NFCC member, was interested in ME! That made me feel safe, encouraged and respected,” wrote Jonelle B.
The Bottom Line
If you’re facing financial hardships, feel like you’re drowning in debt, or considering bankruptcy, non-profit credit counseling can help you weigh your options and choose the best path forward. These agencies offer inexpensive, expert guidance that can help you pave the best financial road for yourself. While there are no guarantees that non-profit credit counseling will solve your problems, it can give you the tools to start chipping it away.
Ultimately, the best thing you can do when facing trouble is to get as much input from highly-trained professionals as you can. You would do the same if your body was unhealthy, so why not do it for your finances? Even if you don’t act on the advice you get, it’s a low risk, high reward way to take stock of your finances.