Credit Counseling

What credit counseling is

Nonprofit credit counseling agencies provide free or low-cost financial education and confidential reviews of your budget, debts, and goals. A counselor helps you understand the options that may fit your situation, including a Debt Management Plan (DMP).

What a Debt Management Plan typically looks like

• The agency works with creditors to potentially reduce interest rates
• You make a single monthly payment to the agency, which distributes funds
• Plans usually run 3 to 5 years and focus on unsecured debts
• You generally close enrolled credit card accounts during the plan

What credit counseling is not

• It is not a loan and does not reduce the amount you owe
• It is not debt settlement and does not negotiate balances down
• It is not a substitute for legal or tax advice

How to vet an agency

• Look for nonprofit status and accreditation
• Check fees clearly disclosed before enrollment
• Confirm what creditors and account types are eligible
• Ask about credit impact and account closure expectations

When credit counseling may help

Credit counseling can be valuable when you are overwhelmed by high-interest unsecured debt, want structure and accountability, and have steady income to support a multi-year plan.