An Ultimate Guide to Credit Counseling

An Ultimate Guide to Credit Counseling

You go to the doctors for your health (hopefully), a school advisor to decide on Spring classes, and a credit counselor to help you with your credit.

If you’ve recently noticed your credit score isn’t where you’d like it to be, then you may benefit from some credit counseling. 

On a day-to-day basis, your credit score doesn’t feel like that big of a deal, but when you’re trying to accomplish some major life goals, a poor credit score can sneak up on you. Credit counseling can ensure that your credit score is in good shape when you need it most.

What Is Credit Counseling?

Credit counseling is what it sounds like. When you’re in search of expert guidance on how to build credit, clear debt, and work on improving your credit report in general, you may want to consider credit counseling. 

Credit counselors can help with an array of financial matters

Similar to financial advisors, credit counselors can help with an array of financial matters:

  • Creating debt management plans for paying off your debt and debt consolidation
  • Finding and choosing credit cards and loans with the lowest interest rates
  • Sculpting a financial plan for your future

If you can afford to work with a credit counselor, you should! 

Is It Worth It To Get Credit Counseling?

To cut to the chase: it is totally worth it to get credit counseling.

Having a good credit score and financial position can improve your life in many ways. Whether you’re looking to move out of your parents, buy your first car, or earn a lower interest rate on your student loans, effective credit counseling can help you get there.

Who Provides Credit Counseling?

Anyone can give you counsel on your credit, even your grandma. Although it’s always nice to hear a perspective from your trusted family and friends, it’s best to turn to a professional counselor. A counselor that you can trust should have earned a formal education.

Most credit counselors have earned their bachelor’s degrees in either accounting, finance, economics, or math. After obtaining a degree, credit counselors gain experience working for a firm and earning their certification.

Financial Counselor: Financial counselors are there to help you manage your finances by looking at them from a long-term perspective. These counselors will look at your income and expenses, debt, and savings and advise you on future actions you can take to improve your financial standing.

Credit Advisor: Credit advisors, also known as credit consultants or credit counselors, are trained to offer advice on debt management, budgeting, and the cream of the crop; credit building.

Although most credit counselors attend college, they don’t necessarily have to. You should always research the person you consider hiring to ensure that you’re receiving quality advice that works in your favor.

Watch Out For Credit Counseling Scams

Sadly, you do have to beware of credit counseling scams. With the vast majority of people worrying about their debt and credit scores, there are plenty of people out there looking to capitalize on your fears.

Things you should beware of when seeking out credit counseling

They reach out to you first: Generally, if a “counseling agency” reaches out to you first, they have paid for your data and are not a reputable credit counselor.

They appear money-focused: If you’re being charged a fee before being given service, you should look elsewhere. In the same respect, you can take debt relief and credit improvement actions for free. A good credit counselor will inform you of all your options.

They make bold promises: There’s no quick fix to your financial situation. A good counselor shouldn’t make promises of a clean slate or an immediate boost in your credit score.

They try to isolate you: If a counselor tells you NOT to contact a credit bureau directly, work with other financial advisors, or reach out to your credit provider, then you’re probably working with a scam artist.

You should always ask to see a credit counselors certification (CCC). Along with a bachelor’s degree, some credit counselors pursue certification from the National Foundation for Credit Counseling (NFCC) or the National Association of Credit Counseling (NACC).

A simple search of the credit counselor or credit counseling agency beside the word “scam” can tell you all you need to know.

What To Expect From Your Counseling

You may feel overwhelmed going into your first credit counseling session, but try to relax; this should be an exciting meeting for both you and your advisor.

Your counselor should be ecstatic about the idea of helping a bright and budding young adult like yourself. Not only will your advisor be able to take pride in helping you out, but you can help them in their career by giving them more experience, a review of their services, and referring your friends to them if you’re happy with their work.

When you first meet, the two of you should get to know each other. You’ll want to ask about the counselor’s experience and if they’ve worked with people in your situation before. 

A good counselor will also ask you about yourself. Your counselor should know your financial goals and what you prioritize in life. You should bring as many financial documents as you can to your meeting and a list of your goals.

Make sure that you also ask your potential counselor for a clear list of their services. You may have been looking for help that they don’t offer or specialize in. Better yet, they may provide services that you didn’t even know you wanted.

Don’t worry; if you don’t know what your goals are, your counselor will talk to you about possible options.

Some Extra Advice

It takes some time to find the perfect credit counselor for you, but there are ways you can start working on your credit report today.

First things first, you can start managing your debt by limiting your use of credit cards and developing a budget that works with a debit card.

Second things second, you can stop using a credit card to build your credit. Extra is the first debit card that helps you build credit. As long as you have a budget and use Extra to stick to it, your credit score can still get some help.

Third things third, you can make sure that your credit report is accurate. Contact credit bureaus and ensure that everything reported to them has been correct. If not, you’ll want to dispute your report right away.

Working on your credit shouldn’t be difficult. A bit of self-help and some expert credit counseling can always take some stress off your shoulders and leave you in a better financial position.

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