Non-Profit Consumer Credit Counseling
Key Takeaways
- You do not have to face credit card debt alone. Free, nonprofit help is available.
- Credit counseling is an educational service, not a debt solution by default.
- Your first counseling session is always free and does not affect your credit.
- Counselors review your full financial picture and explain all your options.
- Consolidated Credit is a nonprofit helping people get out of debt since 1993.
Asking for help can be difficult, especially when it comes to money. But debt is not something you have to face on your own. There is no shame in getting professional guidance, and many people reach a point where outside help is the best next step.
Nonprofit consumer credit counseling exists to help people who are struggling to get out of credit card debt. When someone cannot get out of debt on their own but wants to avoid bankruptcy, counseling is there to provide clear, practical options. The goal is to help people understand their situation and make informed decisions about what to do next.
Consolidated Credit is one of the nation’s largest nonprofit consumer credit counseling organizations. Since 1993, we have counseled more than 10.2 million people. Our mission is rooted in education and consumer advocacy. This guide explains how nonprofit consumer credit counseling works and how it can help you find a realistic path forward.
What is nonprofit consumer credit counseling?
- A free educational service that helps people understand their debt and options
- Focused on consumer advocacy, not selling a specific debt solution
Nonprofit consumer credit counseling is not a debt product or a program by itself. It is a service designed to help people understand their financial situation and learn what options may work best for them. The goal is education first, so people can make informed choices about their next steps.
A nonprofit credit counselor acts as a consumer advocate. That means their role is to review your full financial picture and explain your options in plain language. They do not push one solution over another. Instead, they help you understand the pros and cons of each option based on your income, expenses, and debt.
In some cases, credit counseling may lead to a recommendation for a debt management program. In other cases, a different solution may make more sense. Because nonprofit consumer credit counseling agencies are required to act in the consumer’s best interest, they must recommend the option that fits your situation — even if that option does not involve enrolling in a program.
Credit counseling doesn’t have to be so confusing. Here’s a super-easy 60-second explanation of how credit counseling works.
If you’re facing financial distress because of debt, you have a few options when it comes to finding relief. Credit counseling helps you zero in on the right option to use in your situation. That way, you can rest easy knowing your debt solution is actually going to work.
You start the process with a free debt evaluation to see where you stand. A certified credit counselor looks at your debts, budget and credit score to help you decide which solution will work for you.
If a debt management program ends up being your best option, then your credit counselor can also help you enroll in the program. They can tell you how much you’ll pay on the program and how long it should take versus what it would typically take on your own.
So if you’re struggling to get ahead of your debt, we can help! Call Consolidated Credit today for a free debt evaluation with a certified credit counselor. Together, we can find the best solution so you can finally beat your problems with debt.
How nonprofit consumer credit counseling works
- Starts with a free, no-obligation session with a certified nonprofit counselor.
- Reviews your full financial picture to find the best path forward.
Nonprofit consumer credit counseling is designed to be simple and supportive. The process begins with a free session, where you talk one-on-one with a certified credit counselor. There is no pressure to sign up for anything. The goal of this first step is to understand your situation and help you feel more confident about what comes next.
Step 1: Make a free, no-obligation, toll-free phone call
The first step is reaching out to speak with a counselor, usually by phone.
During this conversation, the counselor will ask questions about how you got into debt and what challenges you are facing right now. This matters because understanding the root of the problem helps the counselor suggest solutions that can work long term, not just quick fixes.
Step 2: Free debt and budget evaluation, including a soft credit pull
Next, the counselor will complete a full review of your finances. This includes looking at your debts, interest rates, income, and monthly expenses.
The counselor may also ask for the last four digits of your Social Security number to do a soft credit check.
A soft credit pull does not affect your credit score. It simply helps the counselor see where your credit stands so they can give accurate guidance.
Step 3: Reviewing options and building a personalized plan
Once your financial picture is clear, the counselor will explain your options in plain language. This may include budgeting changes, outside resources, or a debt management program if that makes sense for your situation.
If another solution – like debt settlement or bankruptcy – works better, a nonprofit counselor is required to explain that as well. The focus is always on helping you choose the option that fits your budget and goals.
This map shows how many people we counseled in 2024 and how many of those went on to enroll in a debt management program:
Learn More About Credit Counseling from Our President
Consolidated Credit’s president Gary Herman explains how counseling started in the U.S. and how it helps consumers who get overextended with credit cards to find relief. He reveals how most Americans end up with debt problems and why debt management is often the way to solve them.
[On-screen text] Interview with Aizer: Gary Herman – President, Consolidated Credit
Dave Aizer: Consolidated Credit has been helping Americans get out of debt for nearly three decades and Gary Herman has been there since the beginning, even though he only looks 25. So, what has he learned over the years that can help you get out of debt? Let’s ask him.
Gary, we all know that Americans are more deeply in debt than ever. Credit card debt is now well over a trillion dollars in this country. What happened?
Gary Herman: The main thing that happened is time. Debt is a creeping problem, that you don’t start off on Day One owing $20,000 – or with five or six credit cards. You start with one card and then you go to a store and to get a discount, you get another card. And you start off with $100 on each card and you only have to pay $25 a month.
So, it seems easy – owing money, making minimum payments. The debt gets a little bigger and a little bigger, And as long as people are comfortably making their minimum payments, they’re really not paying attention to how much interest is accumulating or whether the balance is going up, and up, and up.
And when you have multiple cards, it’s hard to keep track of what your total debt is. The bills are coming in at different times of the month. And if you don’t pay attention to it, after the course of three, four, or five years, you wind up owing twelve, fifteen, twenty thousand dollars. It is not uncommon for us to see people owing over $30,000.
Aizer: And then you hear and you see all these ads – “We can make your debt go away.” How do debt consolidation and debt management work?
Herman: Speaking specifically about nonprofit credit counseling agencies, despite what you may think, credit card companies want to help you get out of debt. But the average person struggling with debt owes five, six, seven credit cards. And the credit card companies aren’t allowed to work together to help you get out of debt. So, they need an intermediary.
Back in the 70’s they created a program for people who qualify for nonprofit debt management or credit counseling programs, where the company will do a budget, see what options the consumer even has – not everyone can qualify for debt management, it doesn’t help everyone. You have to need it, you have to be able to afford it, and it has to help you. You have to save money, time, or both before a credit counseling agency would put you on the program.
Consumers make one payment. They get a lower interest rate, and it’s usually around nine or ten percent, which is significantly better than the twenty percent or higher, especially if you’ve fallen behind or are about to fall behind. They [credit card companies] risk price you and you’re typically paying in excess of twenty percent interest.
Aizer: So, if you qualify, it sounds like a debt management program can actually be really helpful.
Herman: It’s really helpful, if you can make the payments. It’s a commitment. It does take around four years. You have to be able to afford the payment. It saves a lot of money in interest. It can help you avoid bankruptcy for people who really can’t afford to pay their debts off on their own.
Aizer: What should people look for in a nonprofit credit counseling agency? After all, they’re entrusting their financial futures with these companies.
Herman: That’s actually a really good question. For the most part, the programs that credit counseling agencies are the same because they come from the credit card companies. But it really makes a difference, the level of sophistication, the level of service, and the quality of the people who work there.
You should also make sure that the company has been in business since at least the early 2000’s, and make sure they’re licensed and/or registered in the state where you live. You can check the website to make sure that they’re properly registered, properly licensed. Check social media for reviews, and do research also with the Better Business Bureau. [It] has also credit counseling agencies scored. Consolidated has an A-plus rating and we’ve been doing this for a very long time.
Aizer: Can’t do much better than A-plus.
Herman: That’s right.
Aizer: Gary, thank you so much.
Herman: Sure. My pleasure.
Aizer: If you are in debt and you don’t know how to get out, call one of Gary’s certified credit counselors today for a free assessment.
How much does nonprofit credit counseling cost?
- The initial counseling session is always free and comes with no obligation
- Fees only apply if you choose to enroll in a debt management program
Understanding Costs When You Get Credit Counseling
Consolidated Credit’s financial education director April Lewis-Parks details the costs of the two steps in the credit counseling process. The first step is entirely free, while the second step of enrolling in a debt management program has a fee structure that’s set based on the state where the client lives.
[April Lewis-Parks, Financial Education Director, Consolidated Credit] How much does credit counseling cost?
You won’t believe how much, because the counseling is free.
A certified credit counselor gives you a free debt analysis because it doesn’t make sense to pay money to find out if you can get out of debt.
You’ll learn about your debts, your credit, and your budget. You might be eligible for a debt management program. A DMP can cut your total credit card payments by up to 30 to 50 percent.
But there is a fee involved for most DMP clients, and that ranges from $0 to $79 a month. This depends on your debt amount, state regulations and your budget.
Even if you don’t want to sign up for a DMP or you find out it’s not really the best solution for you, you can always use the free debt analysis to save you money. The only cost? About 30 minutes of your time.
| First credit counseling session | Free |
|---|---|
| Debt management program | Fees vary by state, capped at $79 nationwide |
The first step in credit counseling does not cost anything. You can talk with a certified counselor, review your finances, and learn about your options for free. There is no pressure to sign up for a program. This gives you a chance to get guidance without adding another expense.
If you enroll in a debt management program, there are setup and monthly fees. These fees are regulated and capped under state guidelines, and many people pay well below the maximum. In many cases, the monthly fee is around $40.
These fees help cover the cost of managing accounts, working with creditors, and providing ongoing support. All costs are explained clearly before you enroll. Nothing is added without your approval, and you remain in control of your decision at every step.
How consumer credit counseling impacts your credit
- Free counseling does not affect your credit score
- Paying down debt through a structured plan can support healthier credit habits
Many people worry that getting help with debt will hurt their credit. In most cases, that is not true. During a free counseling session, the counselor may review your credit report using a soft credit check. A soft check does not lower your credit score. It is only used to understand your situation and give accurate advice.
If you choose to enroll in a debt management program, the impact on your credit is usually neutral or positive when payments are made as agreed. Each on-time payment helps build a steady payment history. As balances go down, your credit utilization improves. These are two important factors that affect credit scores.
Credit counseling is not meant to be a quick fix for credit. The focus is on building better habits over time. By staying consistent and reducing debt at a pace you can manage, many people see their credit improve as they move forward.
How to choose a trusted credit counseling service
- Make sure the agency is rated highly by the Better Business Bureau.
- Check consumer reports and independent third-party reviews online.
- Make sure the organization is a member of an accredited trade association. Consolidated Credit is a proud Financial Counseling Association of America (FCAA) member, formerly the Association of Credit Counseling Professionals (ACCPros).
- Find an agency with a proven track record of working with the creditors you have accounts with.
- Ask what financial education materials they offer. A good agency will help you learn better money management skills to avoid future debt challenges.
- Then, get a feel for the company in your free credit counseling session. If you don’t feel comfortable and confident in the service, remember that you’re under no obligation to sign up for anything.
Not all credit counseling services are the same, so it’s important to know what to look for. A trusted agency should be a nonprofit organization with trained and certified counselors. Nonprofit agencies are required to focus on education and consumer support, not selling a product.
It also helps to check independent ratings and reviews. Look for strong ratings with organizations like the Better Business Bureau and membership in recognized industry groups. These signs show that an agency follows ethical standards and best practices.
A good credit counseling service should take time to explain your options and answer your questions. You should never feel rushed or pressured to enroll in a program. The free counseling session is your chance to see if the service feels right for you. If you feel supported and informed, you are more likely to have a positive experience.
Frequently asked questions about credit counseling
That depends on your accounts. If you hold accounts jointly, then you would need to go through credit counseling and debt management program enrollment together. If you maintain separate accounts and only wish to enroll your debts, then you can complete the process without your partner.
You can start the process online by completing a free debt analysis form. This will provide all the basic information that the counselor will need to complete your free session. However, after that, you will need to talk directly to a credit counselor. That’s the easiest to do over the phone.
After you enroll in the program, you’ll be able to track your progress and communicate with the client services team through Consolidated Credit’s online members portal.
There are some numbers and documents that may be useful to have when you call, but it’s not necessary. During your counseling session, the counselor will ask about your income, expenses, bills, and the current balances and interest rates on your credit cards.
Having current monthly statements on hand can be helpful, but you can also provide estimates if you don’t have the statements readily available. If you decide that you’d like to build a formal budget, you can even call back and provide the counselor with the real numbers later.
The initial credit counseling session typically takes 30 minutes to one hour. It’s typically completed in one phone session, although it can be split up if that’s more convenient for your schedule.
If you decide to enroll in a debt management program, the program usually takes 36 to 60 months to complete.
No. While the type of counseling you receive is similar, there are some significant differences that are important to note.
When you file for bankruptcy, you are required to go through a specialized counseling program known as pre-bankruptcy counseling. Pre-bankruptcy counseling is a required 60- to 90-minute session. It costs around $50, although fees vary by state and may be waived if you can’t afford to pay. This session is intended to review your financial situation and make sure you are ready to file bankruptcy.
This is different from the free credit counseling session that you receive through when you call Consolidated Credit or complete a form on this website. The biggest difference is that the counseling you receive here is entirely free. It usually takes about an hour to complete.
In free credit counseling, you still review your financial situation one-on-one with a certified credit counselor. You also draw up a budget and review your options for debt relief, so you can make sure you choose the right option. So, you get many of the same benefits that you get from pre-bankruptcy counseling, without the cost.
