Living with credit

Consumers can now get credit counseling online

Kelly Dilworth

It’s become easier than ever to shop, bank, pay bills and manage your financial life online or through your mobile phone. Now, you also can get tailored advice online for repairing your finances or digging out of credit card debt.

Nonprofit credit counseling agencies increasingly are offering personalized advice and credit information online to consumers who aren’t yet ready to commit to in-person counseling sessions or lengthy calls on the phone.

Take Charge America, the Phoenix-based credit counseling group, is just one example. In September, Take Charge America rolled out a new website to help consumers identify their financial strengths and weaknesses and develop a personalized plan for slimming their expenses or whittling down their debt.

Several other nonprofit credit counseling agencies, including Advantage Credit Counseling, Money Management International and InCharge Debt Solutions, also offer online credit counseling services. Some even have hired counselors to communicate with consumers via instant messaging rather than over the phone.

“People are more familiar and more comfortable with working online,” says Take Charge America’s Ted Engel, and that helped spur the credit counseling agency to offer an online option that is more convenient and less time-consuming.

I took Take Charge America’s free online credit counseling service for a test drive, even though I don’t have a lot of debt. I was impressed by how easy it is to use and how helpful it was to get a visual overview of my finances.

Here’s how it works: In exchange for inputting your monthly income and expenses, including your outstanding debt, the online credit counseling service will analyze your monthly budget and point out areas of weakness that could get you into financial trouble.

For example, I learned that my personal spending was too high for my monthly income. (My son’s expensive day care bills are the likely culprit.) The online credit counseling service also noted that my credit card debt eats up a significant chunk of my income, which could become problematic if I don’t quickly pay it off. (I plan to pay off my card debt in full this month.)

The service also includes a basic credit summary (similar to what you see on a credit report), information about credit scoring and disputing inaccurate information, and it offers personal recommendations for combating your debt.

For example, it will tell you whether you have enough income to repay your debts yourself or if your financial situation is so stretched that you should consider a debt repayment plan or bankruptcy. (A credit-counseling agency can help you with debt repayment, but it will often come at a price.)

The online service’s advice appears to end there, so consumers who need more help may want to call or meet with a credit counselor. But it’s still a useful tool for consumers who are just starting to research their options and need some extra help identifying which steps to take next.

My assessment: Take Charge America’s confidential service is a useful tool for consumers who are just starting to research their options and need some extra help identifying which steps to take next.

“It’s really for anyone,” says Take Charge America’s Engel. “Our mission is to provide financial education as well as our counseling services. Anyone who needs a financial education would find this helpful.”

See related: 8 steps to picking a credit counselor, Financial planning options for the 99 percent, You did WHAT to pay off your debt?

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