How to Become a Credit Counselor

By Gail Cohen

  • Overview

    The United States relies on a free market to drive its economy, but permission to purchase sub-prime mortgages and a propensity to over-extend one's budget by hitting record credit card limits has resulted in our society becoming a nation of debtors. Credit counselors are trained to guide consumers toward good financial health. Credit counselors help people figure out how and why they have gotten into financial jams, and then figure out ways to get them out and keep them out. If you're comfortable with numbers and you're looking for a career guaranteed to make you feel great about helping people learn to effectively manage their finances, this is your field.

    • Step 1

      Complete college. While there's no rule that says a credit counselor needs more than a high school education, getting into this field could prove difficult without a college degree. Competition from accounting, business and economics majors may offset one's great aptitude for math and numbers if that university diploma is missing.

    • Step 2

      Take business courses and workshops--especially ones that are credit-focused. Consider classes in social work if you seek a job with a nonprofit agency. Expect to get a lot of on-the-job training during your first year. Complete your formal education by seeking certification after you have been in the field for at least a year.

    • Step 3

      Decide where you want to work. Choose from firms that specialize in counseling consumers or turn to loan agencies, banks, credit card companies or retail stores. Get help finding the perfect opening by turning to a college job placement service and mining mainstream and profession-exclusive websites. While salaries for new credit counselors vary by city, schooling and interest, you can expect to earn a median salary of $34,436 per year plus benefits at your first job in the field.

    • Step 4

      Spend a year in the field before you think about starting your own consumer credit counseling business. Private practice calls for professionals with experience and education in a variety of areas to properly serve clients. Use your first job as a platform from which to take industry classes and pass certification exams before you fly solo. Find additional tips for private practice below.

    • Step 5

      Anticipate using a range of skills to help your clients. You may be asked to give advice on allocating limited resources, budgeting for large purchases, loan securitization and debt consolidation. Learn to ask myriad questions to properly assess the financial state of clients seeking your counsel. Understand that not every client will take the advice you dispense. Expect to spend a lot of time delving into credit scores, debt load and other background data to get clients out of their unique financial sinkholes.

    • Step 6

      Expect a secure future. According to industry and Department of Labor trend predictors, the employment outlook through 2014 looks good for credit counseling professionals. A segment of society will likely always be on the wrong side of an optimal credit score, so there will always be a place for those with good heads and solid people skills.
    • Skill: Moderate
    • Tip: Financial counselors do not charge large upfront fees to work with clients.
    • Tip: As an industry practice, initial consultations (in person or on the phone) are free.
    • Tip: Expect to meet with a client for at least an hour to perform a full budget analysis before making recommendations.
    • Tip: You must disclose your fee scale up front.
    • Tip: For added credibility, affiliate with your local Better Business Bureau.

    © Demand Media 2011