How to Know if a Credit Counseling Agency is Legitimate

a notebook with credit counseling written on it that is laying on top of a table.

We recently linked to the FTC’s advice for consumers who are “Knee Deep in Debt,” which includes a recommendation that consumers seek credit counseling if necessary.

In giving this advice, the FTC cautions readers that “just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate.” Indeed, it’s important to ensure that any credit counseling agency you use is reputable before taking advantage of their services.

But how can you know if your credit counselor is legitimate? Here are some tips:

Credit Counseling Tips

1. COA Accreditation

A great signal that a counseling agency is on the level is COA (Council on Accreditation) approval. The COA conducts regular audits and ensures that the service an agency offers is truly a nonprofit benefit to the community. Ask your counselor if they are COA accredited or look for the COA logo.

2. HUD Approval

Not every credit counselor will offer housing counseling, but if they do, make sure they’re HUD approved. HUD conducts rigorous audits and their approval is a good indication that a counseling agency is trustworthy. Look for HUD’s logo of approval.

3. NFCC Membership

Membership in a national organization isn’t a guarantee that an agency will be reputable, but it’s something you should look for as a bare minimum. If an agency doesn’t belong to the nation’s primary credit counseling group, you should be very skeptical.

A professional person holding a check mark, symbolizing a legitimate credit counseling agency.

4. Better Business Bureau Approval

Credit counseling agencies should be members in good standing with the Better Business Bureau. No agency with thousands of clients will be completely free of complaints, but BBB membership ensures that agencies make every effort to respond to consumer complaints until the client is satisfied.

5. Suspicious Services

Most nonprofit credit counselors don’t offer services like debt settlements or credit repair. If an agency advertises credit repair services, consider another alternative.

6. US DOJ Approval

The US Trustee Program keeps a list of credit counseling agencies approved to provide pre-bankruptcy counseling. This approval doesn’t imply any endorsement of counseling services, but it’s another good sign that an agency has taken steps to verify that they are a legitimate nonprofit organization. has certified credit counselors standing by to offer immediate counseling by phone or internet.

Article written by
Melinda Opperman
Melinda Opperman is an exceptional educator who lives and breathes the creation and implementation of innovative ways to motivate and educate community members and students about financial literacy. Melinda joined in 2003 and has over two decades of experience in the industry.

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