What is credit counseling?

Credit counseling organizations can do many things. Here are some examples of things that credit counselors might do:

  • Advise you on managing your money and debts
  • Help you develop a budget
  • Usually offer free educational materials and workshops

Typically, their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting.  Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems.


Credit counseling organizations are usually non-profit organizations. Although most of them are non-profits, credit counselors may charge fees for their services that they take out of the payments you make to them. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.


If you are having trouble making payments on your debts a credit counselor may be able to help you with advice or by organizing a “debt management plan” for all your debts. 

Typically, under a debt management plan you make a single payment to the credit counselor each month or pay period and the credit counselor makes monthly payments to each of your creditors. Under debt management plans credit counselors usually do not negotiate any reduction in the amounts you owe – instead, they can lower your overall monthly payment. They do so by negotiating extensions of the periods over which you can repay a loan (for example, 5 years) and by getting creditors to lower the interest rates (for example, as low as zero percent) and waive certain account fees.


If you're having trouble with debt collection, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).

Ask CFPB provides general consumer information. It is not legal advice or regulatory guidance. The CFPB updates this information periodically.

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