Credit Counseling

Credit Counseling Can Help You Create a Budget, But It Doesn’t Impact Your Principal Balances

Credit counseling is a debt management tool that can help you manage your money and create a plan to pay off your debt.

Credit counseling won’t reduce the amount of debt you owe. They’ll work with you to create a strategy to manage your credit and pay off your debt. Sometimes it is paired with a debt management plan (or DMP), which may incur an additional fee, even if the it is done through a non-profit agency. There are many options for credit counseling agencies. It’s best to do your research and find one that is in good standing with the Better Business Bureau. You will also want to make sure that they are accredited by the National Foundation of Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).

If your credit counselor reviews your financial information and determines that a DMP is the best route for you, they will work with your creditors to negotiate payment terms that work within your budget, including lower monthly payments or lower interest rates. If your creditors agree to the DMP, you would send your monthly payment to your counseling agency and they would distribute payments to your creditors. The benefit is that your creditors would no longer be contacting you. The downside is that it typically takes between three to five years to complete the process. And, your credit counseling agency can require you to give up your credit cards until you’ve completed your DMP.

Note: Credit counseling firms are compensated by the credit card companies themselves.

They are paid a fee for your on-time payments. CBS News reports, “The biggest source of incomes for debt counseling services come from the credit card companies themselves. Creditors kick back a percentage of each monthly payment to the debt counselor. The credit counseling company wants to place you in DMP, so it can earn money from creditors.”

Balance Reductions and Lower Monthly Payments

When you become part of our debt reduction program, your monthly deposits will be lower than monthly payments you were making.

Free Debt Relief Quote

First Name(Required)

Last Name(Required)

Phone Number(Required)

Enter Your Debt Amount

By clicking “Submit”, you authorize—with respect to the telephone number provided above and any other telephone number associated or related to you that may be provided to us in the future— DebtBlue and its affiliated companies to contact you by phone, text, email, mail, or by artificial or pre-recorded voice, even if you have listed yourself on any Do-Not-Call List. You also agree to our Privacy Policy and Terms of Service. If you prefer, you may call us at (855) 997-6532 to continue your inquiry. Please note that all calls with the company may be recorded or monitored for quality assurance and training purposes. All claims are based on enrolled debts. Not all debts are eligible for enrollment. Estimates based on prior results, which will vary based on specific circumstances. We do not guarantee that your debts will be lowered by a specific amount or percentage or that you will be debt-free within a specific period of time. DebtBlue does not assume or pay any part of a client’s debt, does not provide legal advice nor offer credit repair. Program is not available in all states.

This field is for validation purposes and should be left unchanged.