DH Expert Guides

The Help Center contains over 100 articles written by industry experts.

Guide to Credit Counseling

What is credit counseling?

In credit counseling, a counselor works with a debtor works with a counselor to set up a realistic payment plan. The counselor negotiates with creditors for lower interest rates and sets up monthly payments and a timeframe that works with the debtor’s budget. Additionally, good credit counselors help debtors to plan for their financial futures in addition to fixing current problems.

Back To Top

Am I a good candidate for credit counseling?

Credit counseling can benefit anyone who is having difficulty paying their bills each month.

Back To Top

What should I look for in a credit counseling agency?

Your counseling agency should be accredited by the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies. Check with the Better Business Bureau for customer complaints. Make sure that an agency offers a wide range of financial services and shows interest in your personal circumstances.

Back To Top

Are there some credit counseling companies I should avoid?

A credit counseling company should be concerned with your overall financial livelihood both present and future. Any company that does not fully consider your unique situation or that pressures you into only one option (like a debt management plan) should be avoided. No company can settle your debt for “pennies on the dollar”, and any company that makes such empty promises is too good to be true.

Back To Top

How long will it take to become debt free?

How long it will take someone in credit counseling to become debt free depends upon his or her unique situation. You can expect to do so at the end of the payment plan devised by you and your counselor, which usually lasts a few years.

Back To Top

How much will it cost?

Costs vary greatly from company to company. There may be an initial enrollment fee and/or monthly maintenance fees. Many companies claim to be non-profit, but some still are quite costly or even unaffordable.

Back To Top

Will credit counseling affect my credit?

Some credit counseling companies report your enrollment to the credit agencies, and some do not. If enrollment is reported, it will not affect your credit score, but it may affect your ability to get new credit. Some creditors will not be willing to extend you credit, but others will see is as a responsible move to deal with debt.

Back To Top
Solution Finder
Solution Finder - Eliminate Your Debt