3 Ways Credit Counseling Can Help You Get Better With Money

Everyone needs a helping hand sometimes.

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Main points:

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

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No one is born good with money. Some people are lucky enough to grow up in families where money management is taught from an early age. Others of us only get “credit cards are bad” and “rent is a waste of money” and not much else, and so we struggle to get a foothold, often losing sleep (and money) along the way.

If you need help managing your finances, credit counseling may be an option for you. There are many nonprofit agencies, such as the National Foundation for Credit Counseling (NFCC), that can match you with a credit counselor to help you manage debt, pay for school, or even buy a home. Here are some ways this service can improve your financial life.

1. You will gain new perspectives related to finances

You’re always immersed in your money problems, so it can be difficult to get a complete picture of how your income, expenses, debts, and money pain points are working. 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—one who doesn’t live the reality of your money.

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

2. You will 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’re feeling lost analyzing those three-digit numbers and how they affect your financial life, meeting with an advisor can do wonders. A credit report review involves checking your credit reports (which, remember, are free to access weekly until the end of 2023) and using them to find potential errors.

You can dispute errors on your credit report and have them removed, raising your score in the process. A credit counselor will also provide advice on how to improve your credit and education on how having a better credit score can qualify you for better credit cards and lower loan rates.

3. You will 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 out. Good news. credit counselors are an excellent resource for debt help. If you’re having trouble managing all of your payments, you may be able to get into a debt management plan, where a nonprofit agency will contact your creditors to reduce your interest (or even your balances), and then you’ll make a one-time monthly payment to the agency that pays to your creditors on your behalf. This will make it much easier to manage future debt payments.

Is credit counseling right for you?

As you can see, a credit counselor can do a lot 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 because you have to spend so much time worrying about the present, it’s probably a good idea to at least contact a credit counseling agency. The Federal Trade Commission notes that you can check any agency you are considering with your state attorney general and local consumer protection agency to make sure the agency is legitimate. For example, credit counseling services that charge high fees to help you may not.

Life is too short to be afraid of your finances. If you are under extreme stress due to debt and other money problems, get help.