Credit counseling provides consumers with credit counseling guidance on consumer credit, money management, debt management, and budgeting. The goal of most credit counseling is to help a debtor avoid bankruptcy if they find themselves struggling with debt repayment.

Many counseling services will negotiate with creditors on the borrower’s behalf to reduce credit card and loan interest rates and waive late fees. According to the Consumer Financial Protection Bureau (CFPB), credit counseling agencies most often operate on a nonprofit basis, although there are credit counselors that are for-profit.

The National Foundation for Credit Counseling is a nonprofit that connects consumers with nonprofit credit counselors. The U.S. Trustee Program keeps a list of credit counseling agencies approved to provide pre-bankruptcy counseling.2 Bankruptcy law mandates that anyone filing for bankruptcy must first undergo credit counseling.3

As you search for a credit counselor, there are certain questions to keep in mind that can help you find someone reputable with whom to work.

Some of the most important things to ask include:

What services do you offer?
How is credit counseling offered at your organization
How often will we meet or communicate
Do you offer free educational resources
What fees, if any, do you charge
What if I can’t afford to pay

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