Credit Counseling

Credit counseling is a free service that helps you evaluate your finances and identify debt relief programs. InCharge's certified credit counselors may help you enroll in a  debt management program, lowering your interest rates and monthly payment.

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Credit counseling is a free service that provides help with budgeting, solutions for becoming debt-free, and tips for managing your money successfully.

Credit counseling is offered by nonprofit agencies and is sometimes called debt counseling. It involves a 30-minute interview with a certified counselor who gathers information about your financial situation to develop a plan that helps you regain control of your finances.

The plan may include a debt management program that nonprofit agencies like InCharge Debt Solutions offer to pay off credit card debt. Credit counseling also includes looking at your credit report to verify all accounts and educational materials to map out your financial future.

Credit counseling aims to provide a solution that helps you achieve debt relief and get on a financially healthy path.

The service is free and can be done over the phone or online. Credit counseling does not directly impact your credit score, but if the advice provided helps pay down your debt with on-time payments, it can lead to an improved score.

During a counseling session, you’ll be provided the following:

  • Budget Review: A counselor helps you create a budget that includes personalized suggestions on cutting expenses.
  • Debt Analysis: A review of the debt accounts in your credit report.
  • Recommendations: An action plan with recommended debt solutions and alternatives available to you.

The action plan is only a suggestion. Credit counselors give you an understanding of your financial situation and empower you to take action if needed.

study on credit counseling by researchers at Ohio State University found that those who received counseling reduced credit card debt by nearly $6,000 in the first 18 months. That’s compared to a $3,600 reduction by those who did not receive counseling. About 70% of the 12,000 participants said credit counseling improved their financial confidence.

“People in a crisis situation are looking for partners they can trust and that’s what a good credit counseling agency should provide,” Rebecca Steele, CEO of the National Foundation for Credit Counseling (NFCC) said. “We are going to spend time with the consumer going over their income, the stability of their income, understanding their budget needs and teaching them how to save money for those rainy-day situations. That’s the real value of a credit counseling agency.”

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Counselor Spotlight

Carolyn Green

If you bump into Carolyn Green at a company function, don’t ask her what she does at InCharge Debt Solutions. Ask her what she hasn’t done!

Benefits of Credit Counseling

Credit counseling is an effective method for establishing a budget and tackling debt, but the benefits don't end there.

  • Credit counseling optimizes your budget and provides the tools to make informed decisions about credit. Becoming a knowledgeable borrower and savvy credit user will improve your credit score over time.
  • Credit counseling can help strategize how to pay off predatory payday loans. These loans charge excessive interest rates that can trap you in years of debt.
  • Credit counseling can help stop aggressive phone calls from debt collectors if you end up enrolled in a debt management program. This can offer peace of mind and allow you to focus on paying off your debt without badgering from creditors.
  • Credit counseling can stop wage garnishments from dwindling your paycheck. As long as you're participating in a debt management program (and paying on time), debt collectors are unable to garnish your wages.

Credit Counseling Services

Nonprofit agencies offer additional services to debt counseling, but credit counseling starts with the question-and-answer session to gather details of your financial situation. Depending on the counselor’s recommendation, you might also take advantage of one of the following solutions:

  • Debt Management Plan
  • Bankruptcy Counseling
  • Housing and Education Counseling
  • Student Loan Counseling

Debt Counseling

This is the initial credit counseling session in which a certified credit counselor collects information about your income, assets and expenses. They will then pull a copy of your credit report and review your debts with you. Counselors make recommendations for reducing expenses to help you pay off your debt faster. They may recommend a debt management program or bankruptcy based on your income, assets, and debts. Read more about what happens during a credit counseling session.

Debt Management Plan

If you have enough income to handle your debt, a counselor may recommend a debt management plan (DMP). A debt management plan is not a loan and doesn’t reduce the amount of money you owe the credit card company.

What a debt management plan does is make it easier – and more affordable – to pay off credit card debt in 3-5 years without having to take out a loan. Credit card companies offer reduced interest rates to people who enroll in a debt management program in exchange for closing your credit cards and making consistent, on-time monthly payments.

Dropping the interest rate to around 8% (and sometimes as low as 0%!) reduces the consumer’s monthly payment to an affordable level while paying off debt in 3-5 years.

Nonprofit agencies do charge a fee for this service. There is a one-time set-up fee (usually $50, but not to exceed $75) and a monthly service fee averaging $32, depending on your state and debt amount. Learn more about debt management program fees.

Credit Card Debt Forgiveness

The credit card debt forgiveness program makes it easier to free yourself from credit card debt by reducing the amount you owe by up to 50%. You have 36 months to pay off the remaining balance, which must exceed $1,000 to qualify for the program. This will harm your credit score because credit bureaus prefer you repay your debts in full. However, you can overcome the initial blow to your credit by paying your bills on time and completing the program without taking on more debt.

Bankruptcy Counseling

The certified counselors at InCharge can provide pre-file credit counseling and pre-discharge bankruptcy education for consumers filing bankruptcy. Both sessions are required for anyone going through bankruptcy. Each education course can be completed online or over the phone with a credit counselor.

You will receive a certificate of completion to provide to the court before debts are discharged. There is a fee involved, but it can be waived if you can’t afford it.

Housing and Education Counseling

Credit counselors can provide housing counseling such as pre-purchase counselingforeclosure prevention counseling, and homebuyer education. Many lenders and government assistance programs require a certificate of completion from a homebuyer education course as a condition of the mortgage. These courses teach consumers budgeting, finding a mortgage, paying taxes, home inspections, and necessary lessons in the home-buying experience. The classes are offered by nonprofit organizations approved by the U.S. Department of Housing and Urban Development (HUD).

Student Loan Counseling

The federal government has eight student loan repayment plans with different benefits and eligibility requirements. With student loan counseling, you can get a customized report of your federal student loan repayment options by providing information to a certified counselor. The data is analyzed using a logic engine, which identifies suitable repayment options – including potential discharges, repayment plans, and rehabilitation.

Military and Veteran Debt Relief

InCharge offers nonprofit counseling to military service members, veterans, and their families free of charge. We recognize that service members from all branches of the military face unique financial challenges related to frequent relocations, deployment, disability, and PTSD. We're here to help.

More on military debt relief:

When Is Credit Counseling a Good Idea?

Credit counseling is valuable at any decision-making stage of your financial life but probably most helpful when you realize you can't keep up with expenses and must find a way to reduce debt.

Some typical examples of situations when credit counseling would help include:

  • job loss or reduction in work hours causes financial problems.
  • Your work is steady, but you're still living paycheck-to-paycheck because you can't create a budget or don't have the discipline to live with one.
  • You use credit cards to pay everyday expenses like rent, utilities, food, and gas because you don't have enough cash in your wallet or money in your bank account to pay those expenses immediately.
  • Overspending on things like dining out, entertainment, and clothing means there is never enough money left over to put in a savings account or emergency fund at the end of the month.
  • Credit counseling is a reliable alternative if you've been rejected for a debt consolidation loan for unsecured debt.

Situations like this are common and correctable. Credit counselors have experience dealing with the issues that weigh consumers down and can offer a list of suggestions and solutions that will change the direction of your financial life for the better.

How Credit Counseling Can Help You Reach Your Financial Goals

Credit counseling isn’t only about offering debt-relief solutions. Certified counselors are trained to ask consumers to look past the short-term financial problems and set long-term goals that will help them avoid future problems.

Here are goals you can work toward once you have your debt under control

These are achievable goals if you have the right plan. Good credit counseling will help you shape that plan.

How to Choose the Best Credit Counseling Agency

The Federal Trade Commission recommends contacting nonprofit credit counseling companies, like InCharge Debt Solutions, for online credit counseling, over-the-phone, or in-person counseling.

Most nonprofit agencies offer credit counseling for free; however, the FTC website warns that nonprofit status does not guarantee the services are free and suggests careful research before choosing a credit counseling company to avoid credit counseling scams.

5 Characteristics of a Reputable Credit Counseling Company

  1. Nonprofit: Check the company’s “About Us” section on its website to make sure it is a registered 501(c)(3) nonprofit organization.
  2. Licensed and Accredited: Be sure the organization is accredited by the Council On Accreditation (COA) before signing up for their program. The COA determines the standards by which the credit counseling industry follows.
  3. Certified Counselors: Counselors should be certified, preferably by the National Foundation for Credit Counseling (NFCC). The NFCC requires member organizations to adhere to strict guidelines and regular audits for data security, counselor certification and results-oriented customer service.
  4. Low Complaints: Contact the state attorney general or Better Business Bureau for records of complaints and how the agency responded to them.
  5. Free Education: Choose an agency that provides free financial literacy education to clients and the general public.

Questions to Ask a Credit Counselor

Credit counseling agencies aim to reduce your debt, but their methods for doing so can vary tremendously. Research and compare different companies to determine if they offer suitable solutions. Asking pertinent questions can help you choose the right credit counseling agency for your situation. Here are some questions to keep in mind during your search:

  • What Services do you provide? The ideal agency will offer various services, including budget counseling, financial planning, and debt management. Beware of agencies that try to lock you into a plan without reviewing your finances and accounting for your long-term goals.
  • What educational materials do you provide? Most agencies will offer an abundance of free information and educational materials on managing credit and paying off debt. If your agency does not, it’s a red flag, and you should keep searching.
  • Are your counselors accredited or certified by a third-party organization? Ask about the qualification process for becoming a credit counselor. Aim for an agency that uses a third party to train its counselors.
  • What are your fees? Find out if there are initial, set-up, or monthly fees for participating in their programs.
  • What if I can't afford your program? Ask about reduced or waived fees. Many nonprofit agencies will work with consumers for free or at a discount.
  • How do you keep my information confidential? This can ease anxiety if you're worried about keeping your personal information secure.
  • How are your employees paid? If employees are paid every time you pay for additional services, consider looking elsewhere.

For-Profit vs. Non-Profit Credit Counseling Services

The NFCC, which certifies credit counselors, has approved 57 nonprofit agencies. The NFCC accredits no for-profit companies.

"Providing free credit counseling is our obligation as a nonprofit," Steele said. "We have the consumer's best interests at heart, and our counselors are trained and understand social work."

In other words, it's not all about the money. Nonprofit agencies are there to serve the consumer. For-profit companies are there to make a buck.

Credit counselors at nonprofit credit counseling agencies operate under strict state and organizational guidelines designed to ensure they act in their clients' best interests. States frequently audit nonprofits to ensure they comply with all of that state's regulations, and they must demonstrate that they are acting in the best interests of all of their clients.

For example, InCharge offers clients monthly newsletters with money-saving tips and stories of people who have gotten out of debt to help motivate clients to do the same.

What Happens During Nonprofit Credit Counseling?

On average, a consumer credit counseling session takes about 30 minutes. You can receive a session online or over the telephone. You’ll provide information about your income, expenses, and debts, after which you’ll receive a personalized debt relief solution.

Success Stories

Why Choose InCharge for Credit Counseling?

InCharge offers convenient online counseling: enter your income, assets, and debts, and you’ll receive a personalized debt relief solution – all without having to talk to a person. InCharge has an A+ rating from the BBB, and we are certified by the NFCC.

Apply online or call us at 1-866-721-3925 to learn more about how to retake control of your finances.

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About The Author

Tom Jackson

Tom Jackson focuses on writing about debt solutions for consumers struggling to make ends meet. His background includes time as a columnist for newspapers in Washington D.C., Tampa and Sacramento, Calif., where he reported and commented on everything from city and state budgets to the marketing of local businesses and how the business of professional sports impacts a city. Along the way, he has racked up state and national awards for writing, editing and design. Tom’s blogging on the 2016 election won a pair of top honors from the Florida Press Club. A University of Florida alumnus, St. Louis Cardinals fan and eager-if-haphazard golfer, Tom splits time between Tampa and Cashiers, N.C., with his wife of 40 years, college-age son, and Spencer, a yappy Shetland sheepdog.


  1. N.A. (ND) Choosing a Credit Counselor. Retrieved from
  2. Lane, S. (ND) Stopping Wage Garnishment Without Bankruptcy. Retrieved from