what is the difference between credit repair and credit counseling?

To best understand the main differences between credit counseling and credit repair, let’s understand that both are strategies to improve your credit using different approaches. Credit counseling hones in on providing resources that essentially assist in changing money practices to successfully reduce and eliminate debt. For example, if there’s a need to create a budget, lower interest rates or create a debt elimination plan thoroughly, a trained credit counselor would be best for this scenario. These individuals work for non-profit agencies and are available to provide sound, professional advice no matter your personal situation.

On the other hand, a credit repair company completely focuses on identifying false information that is listed on your credit report. These resources will take the action of disputing claims and do an overall cleanup to any incorrect information on your credit report.

We reached out to Apprisen to help us on the key differences.

What is credit counseling? 

Answer: A financial health service offering guidance and advice from certified counselors. Credit counselors can: 

  • Advise you on managing your money, debts & credit matters
  • Help you develop a budget
  • Help you establish a custom debt management plan
  • Provide free financial resources

Are there specific qualifications or an approval process? 

Answer: Everyone can get help from a National Foundation for Credit Counseling (NFCC) accredited agency regardless of their financial situation. Initial sessions are free.

A) Are there any costs associated if you sign up for credit counseling at the Score a Better Future event?  

Answer: No costs are associated for the 1-on-1 credit counseling/coaching session. 

B) What would it cost if a consumer “walks in” to see a credit counselor after SABF?

Answer: All initial consultation sessions are free. Programs like Apprisen’s Debt Management Program, and other services may require a nominal fee but fees can be reduced or waived due to financial hardship.

What is the key difference between credit repair services and non-profit credit counseling? 

Answer: Credit repair companies focus on disputing negative information on a person’s credit report for a fee. Non-profit credit counseling agencies provide consumers with free financial guidance, helping them understand their financial situation including their credit report so they can take actions to build credit now and in the future. 

How can a credit counselor help me to reach my financial goals? 

Answer: They’ll review your financial situation, help you set financial goals, and provide an actionable plan that’ll put you on the path to financial success. 

What credentials should I look for in a credit counseling agency? 

Answer: Non-profit, NFCC certified and accredited through the Council of Accreditation (COA). 

How do I know if I need to seek the help of a credit counselor? 

Answer: If you’re having trouble making payments on your debts or anticipate you will soon, it’s time to call for a free initial session. If you are preparing for big life/financial decisions, such as buying a home or going back to school, those are good times to check in as well! 

How can I locate a reputable credit counselor in my area?

Answer: Go to nfcc.org to find trusted and accredited non-profit agencies.

Take your time as you explore the best option for your financial situation. Seek out referrals and do your own research.

I am an official brand ambassador for FICO. While I receive compensation for my participation as a brand ambassador, opinions are mine. 

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The Finance Bar is a personal finance suite helping women and couples achieve financial wellness through coaching, education, and an innovative learning hub on wheels. Creator Marsha Barnes is a Certified Financial Social Worker, Official FICO Brand Ambassador, and was named the 2018 Best Money Expert in the Net-Worth Category.

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