The Benefits of Credit Counseling, — Even When You’re Not in a Financial Crisis

You may know that you can use credit counseling when you’re dealing with bankruptcy or you need help with debt management, but you don’t have to be in financial trouble to benefit from this service.

Nonprofit credit counseling is a free or low-cost service that includes education and resources for a variety of financial topics. So if you’re looking for information about how money or credit works, or you’re just hoping to improve your financial situation, NFCC-certified credit counselors are here to help.

We asked Jeffrey Arevalo and Kim Sands, both NFCC-certified credit counselors at nonprofit counseling agency GreenPath Financial Wellness, to tell us how they’ve seen people benefit from these services.

Is credit counseling worth it if you’re not in a financial crisis?

Arevalo and Sands both agree that working with a credit counselor can help you when you’re going through a big life change, even if it’s a positive one. 

“There are many times that seeking assistance from a credit counselor could be beneficial,” says Sands. “For some people it’s an upcoming life change like getting married, having a baby or nearing retirement. Others may just want to be able to save a little more, get a better handle on their budget or simply understand their credit report.”

Arevalo points out that talking to a counselor when things are going well can help you avoid a crisis. 

“Part of being financially fit is being proactive,” he explains. “Even if things are stable, life tends to throw us curveballs, and those who have a financial plan will be better equipped to handle those tough times.”

How can credit counseling help people who can’t afford full-on financial planners?

Financial planning can cost anywhere from $200 to $500 an hour, or over $2,000 for a comprehensive plan. At those prices, some people simply can’t afford to pay for financial planning. On top of that, financial planners don’t always specialize in day-to-day financial issues  like managing debt or improving credit.

By contrast, the NFCC’s member-counseling agencies offer many free and low cost services to help people improve their everyday financial lives. 

“A free, one-on-one session with a certified credit counselor can help an individual gain a new perspective on their personal budget, credit, savings and more,” Sands explains. “A credit counselor can share educational tools and materials, develop a detailed financial plan and provide follow-up support.”

Arevalo says that credit counselors can also help you develop short- and long-term financial goals, and discuss strategies for reaching those goals through day-to-day budgeting. He adds that skipping out on the support that credit counselors offer can end up costing you money in the long run.

Are there certain life stages when credit counseling is most helpful?

“Any stage in life can be a good time for credit counseling,” says Arevalo. “From the person who is just starting to build their credit profile, to someone who is more established and wondering if they’re on the right track financially.”

He points out that no matter what you’re working on, your counselor can identify financial strengths or weaknesses and help you develop a plan to harness or address them.

According to Sands, credit counseling can be enormously helpful at every stage of life, “Whether you’re going to college, just graduating, buying your first car or house, starting a family, losing your job, going through divorce or retiring.”

If you find out you’re going to lose your job, for example, Sands says your counselor can help you develop a plan in advance. That includes adjusting your projected budget to include unemployment benefits, and finding expenses to reduce or eliminate. Your counselor can also offer you follow-up sessions and support as needed.

So whether you’re facing an emergency or just looking for some guidance for your next financial stage of life, now is a great time to talk to a credit counselor. You can call 877-388-2227 or visit our Agency Finder page to get started today.