Credit repair and credit counselling are two different services that are often confused. Understanding which one you need can save you months of effort and significant money.
What Is Credit Counselling?
Credit counselling helps you manage debt you legitimately owe. A credit counsellor works with your creditors to reduce interest rates, set up a repayment plan, or consolidate multiple debts into one monthly payment through a Debt Management Plan (DMP).
Credit counselling is the right choice if you have significant debt you need help managing, you are struggling to keep up with multiple payments, or you want a structured plan to pay down what you owe.
What Is Credit Repair?
Credit repair addresses inaccuracies on your credit report. A credit repair company reviews your Equifax and TransUnion reports, identifies errors, and disputes them on your behalf.
Credit repair is the right choice if your credit report contains errors or inaccurate information, you have collections you don't recognize, there are accounts on your report that aren't yours, or your score is low despite a decent payment history.
Key Differences
Credit counselling deals with real debt you owe. Credit repair deals with inaccurate reporting of debt. Credit counselling may create a notation on your credit report (a DMP note) that can affect your score. Credit repair aims to improve your score by removing inaccurate items.
Credit counsellors are often non-profit organizations. Credit repair companies are typically private businesses. In Canada, credit counsellors may also offer insolvency services. Credit repair companies focus specifically on the accuracy of your credit file.
Can You Need Both?
Yes. Some clients need credit counselling to deal with real debt, and also have errors on their reports that need disputing. These are not mutually exclusive services.
Which Do You Need?
Start by getting your free credit report from Equifax and TransUnion. If you see accounts or information that looks wrong, credit repair may help. If your report is accurate but shows a history of debt you're struggling to pay, credit counselling is likely more appropriate.
We offer free consultations and will honestly tell you if credit counselling is a better fit for your situation.