Credit Counseling Pros and Cons
Credit counseling — and the debt management plans it can lead to — offers real advantages for the right situation, alongside some genuine limitations.
Pros
Preserves your credit score better than settlement or bankruptcy in most cases
Often reduces interest rates on enrolled accounts
Single consolidated monthly payment
Free or low-cost initial guidance
Nonprofit agencies generally avoid high-pressure sales tactics
Cons
Doesn't reduce the principal balance owed
Requires closing enrolled credit card accounts
3-5 year commitment typical for a DMP
Not effective for very large debt-to-income ratios
Requires consistent monthly payments to stay enrolled
See how this compares more broadly at Debt Relief Pros & Cons, our parent comparison across all debt relief options.