Credit Counseling vs. Credit Repair

iStock_000011169728XSmallWhat’s the difference between Credit Counseling and Credit Repair?

Credit repair is a two-part procedure. The first step involves removing non-legitimate negative information from your credit file. The second involves your own behavior.

Removing information that doesn’t belong on your credit report can give an immediate boost to your credit scores, and if there is no legitimate negative information then you need only to change some habits to raise your scores significantly.

Credit Counseling comes into play when your bills and your spending habits have gotten out of control and you need some help to rein them in.

A credit counselor will help you create a workable budget and hold you accountable for sticking to it. They’ll also assist you in working out repayment plans with your creditors. Many offer free workshops and educational materials to help you learn how to control your spending and get out of debt.  With their help, you can slowly repair your credit through making consistent on-time payments and learning to live within your income.

Credit Counselors, like Credit Repair Companies, can be good or bad. So before you act, do some research.  Don’t assume that because a company is “non-profit” that it will be free, or even legitimate. Some charge high fees or hide their fees by requiring contributions to their cause, and some are even more dangerous.

As with all things, consumers need to beware. Some legitimate organizations will help you by collecting a set amount from you each month and distributing it to your creditors under the repayment plans they’ve helped you establish. But since not all credit counseling companies are legitimate, so before you agree to such an arrangement, do your research.

If you choose the wrong one, you could find your credit becoming worse instead of better. Promises to pay on time on your behalf are not met – and in some cases, payments are not made for months at a time, if at all.

Contact your financial institution or a local consumer protection agency for a list of legitimate Credit Counselors. And be aware that if you are considering bankruptcy, you’ll be required to get credit counseling within 6 months of filing – and that counseling must be from a government-approved organization. You can find the list of approved organizations at

When you’re concerned about credit, the first step is knowing where you stand today. Get a copy of your free credit report and scores online and read the report. Correct any errors, then go on to the next step – getting out of debt.

Author: Mike Clover your resource for credit cards and online credit reports with scores.

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Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.