3 Ways Credit Counseling Can Help You Get Better With Money

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Everybody needs some money help sometimes.

Key points

  • Credit counseling can help you learn how to better manage your finances.
  • If you’ve never dug into your credit score or credit report before, a credit counselor can show you ways to increase your score and therefore improve your financial life.
  • If you’re struggling with debt, a credit counselor can set up a debt management plan for you.

No one is born good with money. Some people are fortunate enough to grow up in families where money management is taught from an early age. Others of us only get the missives “credit cards are bad” and “renting is throwing money away” and not much beyond that, and so we struggled to gain a foothold, often losing sleep (and money) along the way.

If you need help managing your finances, credit counseling might be an option for you. There are multiple nonprofit agencies, such as the National Foundation for Credit Counseling (NFCC), that can match you with a credit counselor to help you get a handle on paying off debt, paying for school, or even buying a home. Here are a few ways this service can improve your financial life.

1. You’ll get a new perspective on your finances

You’re always immersed neck-deep in your money problems, so it can be difficult to get the full picture of how your income, expenses, debts, and money pain points work together. As the old saying goes, “It’s hard to see the forest for the trees.” But if you meet with a credit counselor, you get the gift of a different perspective — that of someone who doesn’t live your money reality.

You provide your financial information (in the form of pay stubs, credit card statements, and a list of your monthly expenses), and the counselor will be able to put together a budget for you and discuss ways you can improve your spending and saving habits .

2. You’ll learn about credit scores

One of the biggest jobs of a credit counselor is to help consumers understand and improve their credit scores. So if you are feeling lost when it comes to parsing those three-digit numbers and knowing how they affect your financial life, meeting with a counselor can work wonders. A credit report review involves pulling your credit reports (which, remember, are free to access weekly through the end of 2023) and going through them to find possible errors.

You can dispute mistakes on your credit report and have them removed, boosting your score in the process. A credit counselor will also offer tips for how to improve your credit and education on how having a better credit score can qualify you for better credit cards — and lower interest rates on loans.

3. You’ll get real help with your debt

Chances are, you’re interested in getting help from a credit counselor because you’re in debt and can’t see a way to climb out. Good news — credit counselors are an excellent resource for debt help. If you’re struggling to manage all your payments, you’ll be able to get on a debt management plan wherein the nonprofit agency will contact your creditors to get your interest (or even your balances) lowered, and then you’ll make a monthly lump-sum payment to the agency, which pays your creditors on your behalf. This will make it much easier to manage debt payments going forward.

Is credit counseling right for you?

As you can see, there’s a lot a credit counselor can do for you. But is this service right for you? If you’re struggling to keep up with debt payments and can’t focus on your financial future for having to spend so much time worrying about the present, it’s likely a good idea to at least get in touch with a credit counseling agency. The Federal Trade Commission notes that you can check out any agency you’re considering with your state’s Attorney General and local consumer protection agency, to ensure the agency is legitimate. For example, credit counseling services that charge high fees for helping you may not be.

Life is too short to live in fear of your finances. If you’re under extreme stress due to debt and other money woes, look into getting help.

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