Debt, such as credit card debt, may easily spiral out of hand if you don’t pay it off. Depending on how long your costs have outstripped your income, you might owe a significant amount of money in interest or penalties as a result of missed payments. A simple balance transfer or payback plan for debt may not be sufficient in some cases. As soon as you’ve begun falling behind on your payments, it may be time for some professional help.
Can a credit counseling service assist you? Consumers may get help avoiding bankruptcy through these nonprofit firms’ debt management programs, but they can also learn how to better manage their finances through their educational services. Even whether you’re trying to buy or rent a property for the first time, they can aid you.
For your convenience, we’ve compiled a list of the finest credit counseling services, along with information on what to look for and what questions to ask before signing up with one.
A list of the greatest credit counselors in February 2022
- Cambridge Credit Counseling
- GreenPath Financial Wellness
- Consolidated Credit
- InCharge Debt Solutions
- Money Management International
Cambridge Credit Counseling
In addition to debt consolidation, financial education, and bankruptcy counseling, Cambridge Credit is a non-profit organization. Programs for homebuyers, such as foreclosure intervention, reverse mortgage counseling, and seminars for first-time buyers, are also available.
With the guidance of Cambridge’s free credit counseling, you may determine whether or not a debt management plan is the best option for you. A quarter of their customers’ monthly credit card payments have been cut by the Cambridge counselors, and they’ve been able to get out of debt in an average of four years or less.
Consumer Affairs and BBB both gave Cambridge Credit excellent scores, and the company had only the fewest complaints among our top picks. Learn more about Cambridge Credit Counseling by reading our entire review.
GreenPath Financial Wellness
GreenPath may be the finest credit counseling organization for you if you like to meet face-to-face to discuss your financial status. GreenPath’s ability to meet with a counselor in person is a major factor in the company’s high ranking on our list. When it comes to student loans, GreenPath can help. The organization provides both housing counseling as well as debt counseling.
Additionally, GreenPath has a program called the Simple Payment Plan, an online service that takes care of your debt repayments on your behalf. As a result, you’ll be able to better manage your finances and pay your obligations on time thanks to tiny, recurring installments. Many people can benefit from this since they don’t want to commit to a full-scale debt management program just yet. For additional information, see our GreenPath Financial Wellness review.
The largest non-profit credit counseling organization in the country is Consolidated Credit. Its primary goal is to assist companies in passing on sound financial management skills to their workers through a workplace program. Additionally, Consolidated Credit maintains a network of more than 500 educational collaborations with charity and government organizations around the country.
Military personnel, veterans, and their families can also benefit from the company’s financial services. In addition, Consolidated Credit has a wide library of free financial literacy tools that might be beneficial even if you decide to study on your own. Learn more about Consolidated Credit by checking out our in-depth study.
InCharge Debt Solutions
Non-profit credit counseling service InCharge offers free credit and housing counseling as well as the opportunity to enroll in a debt management plan. Since 1997, the service has assisted more than 3 million people in paying off more than $3 billion in debts. ‘ Additionally, it offers a wealth of free financial literacy training and information on its website.
For example, you may work with InCharge to find a house, save for your children’s education, or start a retirement fund. In addition to debt relief, InCharge also offers financial planning services. Military personnel and veterans can take advantage of InCharge’s debt management services that are tailored to their needs.
Money Management International
With the guidance of Money Management International, you may learn how to make a budget, pay off debts and keep your home out of foreclosure while doing all of these other things. You may also get help with your financial literacy by attending in-person seminars, participating in webinars, or taking advantage of free online courses. Free credit counseling sessions are offered by all firms, and they may help you assess if a debt management plan is suited for your situation.
Project Porchlight, a free financial aid initiative for victims of natural catastrophes, is offered by MMI. In the event of a disaster, the software can guide you through the application process for Federal Emergency Management Agency (FEMA) assistance, as well as insurance claims and your own financial recovery.
When looking for a credit counselor, what to look for
A credit counseling firm may be a suitable option for you if you need assistance managing your money. Here are some things to keep in mind when picking a business to deal with:
- For-profit businesses aren’t always looking out for your best interests. Look for a non-profit credit counseling firm to avoid being overcharged.
- Counselors who are accredited and certified. The Council on Accreditation (COA) or the International Organization for Standardization (ISO) can help you verify if the agency is accredited by an organization that is concerned with consumer protection (ISO). The Financial Counseling Association of America (FCAA) or the National Foundation for Credit Counseling (NFCC) shall certify individual credit counselors (FCAA).
- What’s on offer? Choosing a credit counseling service is an important decision, and you’ll want to ensure that your unique needs are met. When it comes to student loans, for example, you should look for a provider that also provides student loan counseling. Those in the military should seek out a company that specializes in military-specific financial solutions.
- If you have a hard time comprehending financial ideas, you’ll want to look for a financial education organization. Some credit counseling firms provide in-person sessions in addition to their online offerings.
- For the most part, credit counseling is free, but signing up for a debt management plan is not. Always ask for a written estimate before committing to any services that need payment. Make sure you know exactly how much the program will cost and how much money you can expect to save before you pay any fees.
- Warning signs. Credit counselors that are paid on a commission should be avoided at all costs. Your counselor can help you with this. If they are hesitant to answer or indicate they are paid on commission, you may want to go elsewhere. Pay attention to organizations that ask for personal information up front or demand a large amount up front (the ones on our list all give free initial sessions).
How you can improve your credit on your own
A credit counseling organization or credit restoration company can help if you’re in a bind, but neither of these options is necessary if you’re just looking for some extra support. In order to improve your financial situation, here are some measures you may take on your own:
- Take a look at your credit score. Annualcreditreport.com provides a free copy of your credit report per the terms of the Fair Credit Reporting Act. Inspect your report for inaccuracies, such as delinquencies older than seven years, inaccurate personal information, commingled accounts, or accounts started using someone else’s information under the guise of your own. By contesting credit report inaccuracies, you may be able to enhance your credit rating.
- Make contact with your lenders. A lump sum payment, rather than late fees, may be an option if you’re dealing with debt and have a large amount of money available to pay instead. If you’re honest about your financial status and what you’re able to pay, you may be able to negotiate a lower settlement price for your debt. At the very least, you may be able to negotiate a reduced interest rate, and you can always ask for a different due date if you’re just briefly behind.
- Make sure you’re on track with your financial goals. Look for ways to save money so you can put more of your earnings toward paying down your debt. A budget is a need for those who do not already have one in place. First, keep a running watch on your expenses, and then set spending caps for several areas. You can keep track of your finances with the aid of an app like Mint or Dollarbird.
- Make a plan for how you’re going to pay back the loan. As soon as you know how much money you have available for debt repayment, devise a strategy. Debt avalanche and debt snowball are two methods that may be used to pay off debt quickly and cheaply, respectively. Picking a debt repayment method you can stay with is critical.
- Refinance or consolidate your debts to save money. A personal loan can help you get out of debt more quickly if your interest rate is reduced by taking out a personal loan to pay for all your bills. Similarly, you can think about transferring your debt to a new credit card with a 0% introductory APR offer. This will allow you to concentrate on repaying your debt without the stress of interest rising.
There are many things you can do on your own to raise your credit score or pay off your debts if you choose to do so. It’s a good idea to set up a free credit counseling session if you’re feeling overwhelmed or are falling behind on your minimum payments. This might assist you in gaining a better understanding of your financial situation and charting a course ahead.
Debt management programs have their drawbacks, yet they may be your only alternative if you have no other options. If you’re considering a debt management plan, a credit counselor can provide you with an honest assessment of the pros and cons of doing so. And if it doesn’t work out for you, they’ll be able to help you find a solution that does. Choose a nonprofit agency that is accredited and has counselors who are certified; any of the organizations on our list of the finest credit counseling firms will do you well.