5 Signs You Need Credit Counseling

When you’re deep in debt and struggling financially, telling another person about the extent of your financial woes may sound scary. But meeting with a credit counselor at a nonprofit credit counseling agency can help you get out of debt, improve your credit and start saving for milestone financial goals like buying a home or starting a family.

Credit counselors at nonprofit credit counseling agencies aren’t there to judge you or make you feel bad for not being able to pay your bills on time or manage money effectively. Instead, a credit counselor can help you with several financial aspects, including:

• Creating a budget
• Finding ways to improve your credit score
• Working out payment plans with creditors
• Creating a debt payoff plan
• Building savings
• Improving financial literacy with classes on buying a home, understanding student loans and more

Wondering if you’re a good candidate for credit counseling?

If any of these five signs sound like you, you may benefit from meeting with a credit counselor at a nonprofit credit counseling agency.

You can’t pay your bills on time

If you’re constantly juggling which utilities to pay and which to let slide for a few weeks or whether to make a credit card payment vs. your monthly car payment, you could benefit from some guidance on budgeting and paying off debt.

A credit counselor can help you create a monthly budget that helps you manage money better and pinpoint areas where you can cut back.

Find out: 4 Ways to Catch up on Bills When You’ve Fallen Behind

You’re in debt over your head

If you have thousands of dollars in credit card debt that you’re struggling to pay off — or even make timely payments on at all — you can benefit from credit counseling. A credit counselor can help you work payments into your budget and come up with a debt payment plan with an end in sight.

Find out: 5 Signs You’re Carrying Way too Much Debt

You have a poor credit score

If you have a poor (less than 580) or fair (580 to 669) FICO score, those three digits are likely  holding you back from getting a car or other loan at a good interest rate, getting approved for credit cards and maybe even getting a job if a potential employer runs a pre-hiring credit check.

A credit counselor can pull a copy of your credit report, show you areas where you need to improve and offer advice on how to raise your credit score to good (670 to 799), very good (740 to 799) or exceptional (800+).

Find out: I Found Out I Have Bad Credit. Now What?

You’re stressed over debt

Peoople with medical debt are three times more likely to have mental health issues such as depression, anxiety and stress due to worrying about debt, according to a 2020 study by AIMS Public Health. But it’s not just medical debt that can keep you up at night and make you irritable, anxious and depressed.

If you’re losing sleep over debt and other financial troubles, meeting with a credit counselor is a good first step to getting back on track and learning good money habits so you don’t end up in the same situation later.

Find out: Being in Debt can Destroy Your Mental Health

Bill collectors are calling

If collection agents are leaving messages, calling you at work or sending urgent letters to pay up, it’s time to seek help. A credit counselor may be able to work out payment plans or a settlement with collectors. The counselor can also help you work payment plan payments into your monthly budget.

Find out: 8 Ways to Deal with Debt Collectors