3 Things You Gain from Free Credit Counseling
Nothing beats an expert opinion that you receive at no cost.
When you’re struggling to eliminate a high-interest credit card debt problem, the last thing you need is to incur another bill. So paying for financial advice really isn’t practical for most people who face challenges with debt.
That makes free credit counseling such an invaluable service. You get an unbiased perspective from a certified expert on your best options to get out debt in your unique financial situation. It eliminates the guesswork and the stress of wondering if you chose the right solution for your needs.
Advantage No. 1: An expert identifies your best option
There’s not just one way to eliminate debt. You have multiple options for debt consolidation, you can enroll in a debt management program or if things are really bad you may need to explore settlement agreements. The average person isn’t usually aware of the nuances of each of these options – when they work and when they don’t.
By taking the time to consult with a certified credit counselor, you can get an expert opinion on which solution will work best in your specific financial situation today. You don’t have to stay awake at night wondering if you made the right choice, because an unbiased expert helped you find the right option.
It’s important to note that certified credit counselors are required to review ALL options available to a consumer when they call for help. So while credit counseling agencies can enroll you in a debt management program, they will only recommend that option if it’s right for your situation. Otherwise, they’ll direct you to other solutions that would work better in your situation.
Advantage No. 2: You get a free credit review
Part of the free counseling session that credit counselor offer is to review your credit report to see where you stand from a credit standpoint. The credit counselor pulls your credit reports to review them and see what negative items may be impacting your credit already. You may be able to identify collection accounts you didn’t know you had and get a big picture of where you stand with credit.
It’s important to note that this credit report review is considered a “soft” inquiry. That means it will not negatively impact your credit score in any way. In fact, nothing in the credit counseling process – even enrollment in a debt management program – is necessarily bad for your credit. In fact, successful completion of a debt management program has been shown to improve many people’s credit scores.
Advantage No. 3: You get a free expert budget evaluation
During your free credit counseling session, the credit counselor will review your budget. This can help them identify spending leaks – places where you’re overspending and can cut back to increase cash flow you have available for debt elimination.
This can be essential, because when you’re in the trenches with your finances, it can be tough to be impartial. You also may not even be aware you’re overspending. For instance, do you know how much of your budget should be spent on food costs or transportation? A certified credit counselor does, so they can help you evaluate your expenses to identify areas that need improvement.
By balancing your budget, you often take a first step toward achieving financial stability. This can eliminate credit dependence so you’re not forced to continue adding to your debt because your budget is out of balance.
Free vs. Fee
It’s critical to note that credit counseling services are almost always divided into two parts. The initial consultation through any nonprofit credit counseling agency is always free. That covers everything explained above, so you review:
- Your debts
- Your credit
- Your current budget
Then you identify the best options to get out of debt. If the right solution is a debt management program, then you move into the enrollment process. This is where fees are applied. There is a small setup fee and monthly maintenance fees when you enroll in a debt management program. Fees are based on your budget and may even be capped at a certain dollar amount, depending on where you live.
These fees are rolled into the monthly payment you make on your program, so the credit counselor always reviews the numbers to make sure they work for your budget. Additionally, in special cases, such as for military servicemembers, debt management program fees may even be reduced further.
You can ask for advice, then decide later
The nice thing about free credit counseling is that there’s absolutely no obligation to sign up for anything in order to receive the free credit advice you need. Even if a debt management program is your best option, you’re not required to sign up at the end of your first credit counseling session.
That means you can see where you stand and take advantage of the free debt expertise, then choose to stop there and go back to consider what you want to do on your own time. Just keep in mind that if you take on new debt or there’s a change in your credit like another account going to collections, it may affect the debt management program plan that you outlined with the credit counselor. Don’t worry though, you can always get back into the process and the credit counselor can help you adjust the plan to fit your new circumstances.
What do you have to lose?
Waiting around usually only just gives a bad situation with debt time to get worse. With that in mind, if you’re struggling with debt and need help, what do you have to lose by calling to speak with a certified credit counselor? The call is free, confidential and you don’t have any obligation to sign up even if the counselor recommends a debt management program. If you’re ready to get started, call us today at or complete an online application to request a free debt, credit and budget evaluation from a certified credit counselor today.