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Are Nonprofit Credit Counseling Agencies Legit?

Yes, many nonprofit credit counseling agencies are legitimate, but it pays to check a few signs before you sign up. Look for 501(c)(3) nonprofit status, membership in national trade groups like the NFCC or FCAA, approval from the U.S. Department of Justice, and proper state licensing. Cambridge Credit Counseling meets all of these markers as a real example.

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Check for Nonprofit Status#

A real nonprofit credit counseling agency should be able to confirm its 501(c)(3) status. Cambridge Credit Counseling Corp is a 501(c)(3) nonprofit organization founded in 1996 and headquartered in Agawam, Massachusetts. Nonprofit status alone does not guarantee quality, but it is one of the first things worth confirming.

Look for NFCC or FCAA Membership#

Trade group membership can be another sign an agency follows accepted industry standards. Cambridge Credit Counseling is a member of the National Foundation for Credit Counseling (NFCC) and the Financial Counseling Association of America (FCAA). Cambridge Credit Counseling is also accredited to the FCAA’s Code of Practice, a set of rules governing how credit counseling agencies operate.

Check for Department of Justice Approval#

If an agency offers bankruptcy-related counseling, it should be approved to do so. Cambridge Credit Counseling is approved by the U.S. Department of Justice Executive Office of United States Trustees to administer a pre-filing credit counseling course and a post-filing debtor education course, both available online.

Approval by the U.S. Department of Justice Executive Office of United States Trustees does not endorse or assure the quality of our services.

Confirm State Licensing#

Credit counseling agencies that operate nationally are required to hold the proper licenses in the states where they do business, though not every state has licensing rules. Cambridge Credit Counseling, as a national agency, is required to maintain the appropriate licenses in every state where it conducts business.

Look for HUD Approval for Housing Help#

If an agency offers housing counseling, HUD approval is a useful signal. Cambridge Credit Counseling is approved by the U.S. Department of Housing and Urban Development to provide housing counseling services nationwide, including first-time homebuyer courses. Cambridge Credit Counseling provides foreclosure intervention and default counseling to residents of Massachusetts, Connecticut, New York, Missouri and Kansas.

Check Staff Certifications#

Legitimate agencies often employ counselors with recognized certifications. Counselors at Cambridge Credit Counseling hold certifications that include NFCC Certified Credit Counselor, HUD-Certified Housing Counselor, HUD-Approved Reverse Mortgage Counselor, and PFE Certified Debt Management Professional.

What Cambridge Credit Counseling Offers as an Example#

Cambridge Credit Counseling offers credit counseling, debt management plans, housing counseling, student loan counseling, reverse mortgage counseling, and bankruptcy counseling. Credit counseling from Cambridge Credit Counseling is a free service for consumers who are having difficulty paying credit card and other unsecured bills, and there is never any obligation to enroll in a Debt Management Plan after a session.

What To Do Next#

Before working with any credit counseling agency, it helps to check for nonprofit status, trade group membership, government approvals, and state licensing. Cambridge Credit Counseling offers a free credit counseling session for consumers who want to explore their options with no obligation to enroll in a Debt Management Plan afterward.

Common questions

Does nonprofit status mean a credit counseling agency is automatically trustworthy?

Not by itself. Nonprofit status is a good starting point, but it helps to also check for trade group membership, government approvals, and proper state licensing. Cambridge Credit Counseling, for example, is a 501(c)(3) nonprofit that also holds NFCC and FCAA membership and DOJ approval.

What is the NFCC and why does it matter?

The NFCC is the National Foundation for Credit Counseling, a national trade group for credit counseling agencies. Cambridge Credit Counseling is a member of the NFCC, and its counselors are certified through the NFCC as well.

Why would a credit counseling agency need Department of Justice approval?

Agencies that offer bankruptcy-related counseling courses need DOJ approval to provide those specific services. Cambridge Credit Counseling is approved by the U.S. Department of Justice Executive Office of United States Trustees to offer both pre-filing and post-filing bankruptcy courses online.

Do all states require credit counseling agencies to be licensed?

No. Not all states have licensing requirements for credit counseling agencies. As a national agency, Cambridge Credit Counseling is still required to maintain the appropriate licenses in every state where licensing is required.

Is credit counseling free?

At Cambridge Credit Counseling, credit counseling is offered as a free service for consumers who are having difficulty paying credit card and other unsecured bills, with no obligation to enroll in a Debt Management Plan afterward.

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