Questions to Ask a Credit Counseling Organization

If you are wondering what you can ask a credit counseling organization to verify their credibility, the Consumer Financial Protection Bureau (CFPB) publishes a specific checklist of questions, and the answers tell you quickly whether you are dealing with a reputable credit counseling agency or a company to avoid.

This guide walks through each question, explains what a good answer sounds like, and flags the warning signs the CFPB says should send you elsewhere. It is written for Colorado borrowers — including the many military families around Colorado Springs — who want trustworthy help with debt before they apply for a mortgage.

What can I ask a credit counseling organization to verify their credibility?

Here is the full list of questions, drawn directly from CFPB guidance. Ask every one of them before you sign anything or send any money.

Question to ask	What a credible answer looks like
What services do you offer?	A range of services — budget counseling, classes on spending and debt, not just a debt management plan
How is credit counseling offered?	In person, by phone, or online, with an initial counseling session and follow-up sessions offered
Do you offer free educational materials?	Yes — avoid organizations that charge for information
What are your fees?	A specific price quote in writing, including any set-up or monthly fees
What if I can’t afford your fees?	They help you anyway — if not, look elsewhere
Will I have a written agreement?	Yes, with all verbal promises in writing
What are the counselor’s qualifications?	Clear answers about training, certification, and accreditation
How are your employees paid?	Not paid more when you sign up for services or pay fees
Can you provide past-client references?	Yes, willingly

Each of those questions exists because it exposes a specific way bad actors operate. The sections below explain what to listen for.

Who should be asking these questions

Anyone considering credit counseling should run this checklist, but it matters most if you are carrying credit card debt, struggling with monthly payments, or trying to clean up a credit report before a home purchase.

In Colorado Springs, that often includes service members and veterans managing debt around a PCS move, when household cash flow shifts and missed payments become a real risk. Getting debts organized before a move — or before a mortgage application — is exactly the kind of financial situation a certified credit counselor is trained to help with.

It also includes first-time buyers who have been told to reduce debt payments before qualifying. A credit counseling session can be a structured way to build that plan rather than guessing.

Before you pick an agency, though, it helps to understand what credit counseling actually is — and what it is not.

What credit counseling actually is

Credit counseling organizations advise you on your money and debts, help you build a budget, develop debt management plans, and offer money management workshops. They are usually nonprofit organizations, and their counselors are certified and trained in consumer credit, money and debt management, and budgeting.

What a credit counselor does

A credit counselor discusses your financial situation with you and helps you develop a personalized plan to solve your money problems. That can include help getting a copy of your credit report and scores, free educational materials and workshops, and budget counseling.

An initial counseling session is typically a full conversation about your whole financial picture, with follow-up sessions offered afterward. Services may be delivered in person at local offices, by phone, or online.

How a debt management plan works

If you are having trouble making payments, a credit counselor may organize a debt management plan (DMP) covering all your debts. Under a debt management plan, you make a single payment to the credit counseling organization each month or pay period, and the organization makes monthly payments to each of your creditors.

A DMP typically works to lower your overall monthly payment to creditors, and counselors may get creditors to lower interest rates, reduce fees, agree not to pursue collection efforts, or lengthen the repayment period. Credit counselors cannot erase your debts, and under a debt management plan they do not always negotiate reductions in the amounts you owe.

Now that the baseline is clear, here is how to use each question on the checklist.

The questions to ask, one by one

What services do you offer?

Look for a credit counseling agency that offers a range of services, including budget counseling and classes for managing spending and debt. The CFPB warns against organizations that push a debt management plan as your only option before spending significant time analyzing your financial situation.

A reputable credit counseling agency treats a DMP as one tool, not the product they are selling you on day one.

How is counseling offered and what are the fees?

Ask whether the credit counseling service is delivered in person, by phone, or online, and confirm that follow-up sessions are available after the initial counseling session.

Then ask about fees directly: are there set-up fees or monthly fees? Although most credit counseling organizations are nonprofits, counselors may charge fees for some services. Get a specific price quote in writing before you commit.

Also ask what happens if you cannot afford to pay the fees or make contributions. If an organization won’t help you because you can’t afford to pay, the CFPB says to look elsewhere.

What are the counselor’s qualifications?

Ask whether the organization or counselor is accredited or certified, and what training or professional certifications the counselor has received. Certified credit counselors are trained in consumer credit, debt management, and budgeting — a legitimate credit counseling agency will answer this question without hesitation.

How are your employees paid?

This question catches hidden incentives. Ask whether employees are paid more if you sign up for certain services, pay a fee, or make a contribution to the organization. If the answer is yes, the CFPB calls that a red flag — go elsewhere.

Can you provide references and a written agreement?

Ask for contact information for a few past clients. Legitimate organizations should be willing to share referrals so you can hear how the agency actually helped people.

Finally, confirm you will have a formal written agreement or contract. Don’t sign anything without reading it first, make sure all verbal promises are in writing, and never sign anything you don’t understand.

Beyond the questions themselves, there are behaviors that should end the conversation immediately.

Red flags that mean walk away

A reputable credit counseling organization should be willing to send you free information about its services without requiring details about your situation first. If a credit counseling service won’t do that, the CFPB says to consider it a red flag and go elsewhere.

Other warning signs include charging for basic educational materials, refusing to put fees in writing, pushing a debt management plan as the only option, and paying employees more when you sign up.

The Federal Trade Commission has found that some organizations offering debt management plans have defrauded people. If you do choose a DMP, contact your creditors and confirm they have accepted the proposed plan before you send any payments to the organization handling your debt management plan.

Part of verifying credibility is also knowing which industry you are actually talking to — because several for-profit businesses market themselves in similar language.

How a credit counseling agency differs from debt settlement and credit repair

Credit counseling organizations are usually nonprofits that advise and educate you on managing your money and debts. Debt settlement companies, debt consolidation lenders, and credit repair companies are typically for-profit companies that charge you for actions you can often take yourself for free.

Debt settlement companies offer to arrange settlements of your debts for a fee, generally have no up-front agreements with lenders, and usually advise you to stop paying your creditors while a settlement is negotiated — which can mean growing fees and interest, further credit damage, and exposure to collection efforts and lawsuits. A credit counselor, by contrast, never advises you to stop paying your debt.

Credit repair companies promise to fix your credit or improve your scores, often by disputing items on your credit report over and over — including accurate items, which typically reappear after the credit reporting company verifies them. You can dispute mistakes on your credit reports yourself, for free.

If a company you are vetting matches the debt settlement or credit repair profile, the credibility questions above become even more important. The next step is building your list of reputable agencies.

Where to find reputable credit counseling agencies

The CFPB points to the Financial Counseling Association of America and the National Foundation for Credit Counseling as starting points. You can also view a list of approved credit counselors through the U.S. Department of Justice.

Once you have a list of potential credit counseling organizations, check with the Colorado attorney general and the state consumer protection agency to make sure each one is reputable. That verification step is what turns a marketing claim of nonprofit status into something you have actually confirmed.

All of this guidance comes from one official source, and it is worth reading directly.

What the official source says

The question list in this article comes from the Consumer Financial Protection Bureau’s Ask CFPB resources on credit counseling, which also explain debt management plans and the differences between credit counseling, debt settlement, debt consolidation, and credit repair.

The CFPB notes that its content is general consumer information, not legal advice. If tax questions come up — for example, around forgiven debt — tax treatment varies, so talk to a tax professional.

Your next step

Build a short list of credit counseling agencies from the FCAA, NFCC, or the Department of Justice list, verify each with the state attorney general, then run every question in the table above during your first call. Get fees and promises in writing before you sign.

If your goal is homeownership in Colorado Springs, loop in a loan officer early. The team at 719 Lending can tell you how your debts and credit report factor into a mortgage application, so your credit counseling plan and your home-buying timeline work together instead of at cross purposes.

Frequently asked questions

What is the first question to ask a credit counseling agency?

Ask what services they offer. A reputable credit counseling agency provides a range of services — budget counseling, educational workshops, and classes on managing spending and debt — rather than pushing a debt management plan as your only option before analyzing your financial situation.

How do I know if a credit counseling organization is legitimate?

Legitimate organizations send free information without requiring your personal details first, put fees in writing, offer free educational materials, employ certified counselors, provide past-client references, and don’t pay employees more for signing you up. You can also verify them through the state attorney general and state consumer protection agency.

Do credit counselors charge fees?

They can. Most credit counseling organizations are nonprofits, but counselors may charge fees for some services, including set-up or monthly fees. Get a specific price quote in writing, and if an organization won’t help you because you can’t afford to pay, look elsewhere.

What is a debt management plan?

Under a debt management plan, you make a single payment to the credit counseling organization each month or pay period, and the organization makes monthly payments to each of your creditors. A DMP typically works to lower your overall monthly payment and may reduce interest charges and fees, but it cannot erase your debts.

What’s the difference between credit counseling and debt settlement?

Credit counseling organizations are usually nonprofits that advise you on managing money and debts and never tell you to stop paying your debt. Debt settlement companies are typically for-profit, charge fees to negotiate lump-sum settlements, and usually advise you to stop paying creditors while negotiating — which can add fees, damage credit, and invite collection efforts.

Where can I find an approved credit counselor?

Start with the Financial Counseling Association of America, the National Foundation for Credit Counseling, or the list of approved credit counselors published by the U.S. Department of Justice. Then confirm each agency’s reputation with your state attorney general and consumer protection agency.

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719 Lending Inc. is not affiliated with or endorsed by HUD, FHA, VA, USDA, CHFA, the CFPB, or any government agency.

Last updated: October 2026