A certified Credit Counsellor reviews your income, expenses, and debts to show where you stand financially.
Options include budgeting changes, a debt consolidation loan, a Debt Consolidation Program, or other solutions.
Debt Consolidation Programs reduce or eliminate interest, stop collection calls, and create one monthly payment.
Many Canadians are facing rising living costs, maxed-out credit cards, and the stress of juggling multiple payments.
The total consumer debt in Canada reached $2.6 trillion in 2025, with the average Canadian owing $27,100 excluding mortgages.
If you’re like one of the many Canadians overwhelmed by debt, you may be looking for a way out. And, if you’re unsure where to turn to for help or what your options are, non-profit credit counselling is the best first call you can make for unbiased, confidential, and free support.
Learn more about what credit counselling is, how it works, and what you’ll gain by speaking with a certified Credit Counsellor.
What Is Credit Counselling?
There are both for-profit and non-profit credit counselling agencies. Non-profit agencies offer free, confidential counselling to help you better understand your financial situation and explore options for managing or reducing debt. It’s not about selling products or offering loans; instead, it’s about providing support, education, and a clear path forward.
When choosing a credit counselling agency, we recommend opting for a registered non-profit agency accredited by Credit Counselling Canada with an A+ Better Business Bureau rating, like Credit Canada.
How Does Credit Counselling Work?
One common misconception is that credit counselling has the same credit consequences as filing for bankruptcy or a consumer proposal. That’s not true. Non-profit credit counselling provides guidance and support without the long-term impact of formal insolvency.
Step 1. Your Free Credit Counselling Session: Getting a Clear Picture of Your Financial Situation
Counselling sessions with a certified Credit Counsellor at a non-profit agency are completely free and confidential. It starts with a full financial assessment to help you understand exactly where you stand and what your best options are.
This process can feel overwhelming to tackle alone, but you don’t have to. Mike Bergeron, Counselling Manager at Credit Canada, says, “During your first counselling session, you’ll leave the call feeling a sense of relief. Discussing your challenges with a professional can be transformative, and the emotional impact of receiving support is powerful.”
Together, you and your Credit Counsellor will:
Review your income, expenses, debts, and assets
Identify spending patterns and opportunities to reduce costs
Look for ways to redirect money toward paying down debt faster
You’ll want to gather the following before your first session:
Credit card statements
Loan documents
Pay stubs or proof of income
A list of monthly expenses
A list of assets and liabilities
“This is an unbiased, personalized approach to help you break free from debt and get back to living life,” Bergeron explains.
You might discover, for instance, that unused subscriptions are draining your budget or that interest charges are holding you back more than you realized.
Step 2. Explore Your Debt Relief Options
Your Credit Counsellor reviews possible debt solutions and helps you map the best path forward, tailored to your needs.
Your Credit Counsellor will never pressure you. Instead, they’ll help you compare your options side by side and make the decision that aligns with your goals.
Step 3. Enroll in a Debt Consolidation Program (DCP) If It’s Right for You
“The key factors in determining whether a Debt Consolidation Program (DCP) is the right solution versus other options are your future financial goals and ability to repay 100% of your debt at a reduced interest rate,” Bergeron says.
If a DCP is your best option, Credit Canada negotiates with your creditors on your behalf to reduce the current interest rate on your outstanding debts as you pay them off through the program. You make one affordable monthly payment, which is then disbursed to the creditors included in your DCP. DCPs typically last 36 to 60 months, and the accounts included in the program, such as credit cards, are closed to prevent you from taking on new debt.
Step 4. Ongoing Financial Counselling & Support
With a Debt Consolidation Program, you receive ongoing money management assistance. Your Credit Counsellor helps you create budgets, identify obstacles, develop strategies, track expenses, change spending habits, plan for irregular costs, and rebuild credit. Credit Canada also offers review counselling sessions and a dedicated Client Services team, so you can rest assured that you have the ongoing support you need throughout your entire DCP.
“Some of the biggest early wins people experience after starting a Debt Consolidation Program include one affordable, fixed monthly payment, no more calls from collection agencies, and a clear light at the end of the tunnel, knowing you’ll be debt-free in just a few years,” Bergeron says.
How Credit Counselling Affects Your Credit
Credit Counsellors perform a soft credit check during your first counselling session, which has no impact on your credit score.
If you enroll in a DCP, you will receive an R7 rating or an R9 rating on your credit report, indicating that you are making payments through credit counselling. This rating stays on your credit report for two years after you’ve completed the program.
Rebuilding credit after completing a debt management program, like a DCP, depends on various factors. “Some clients can start to see their credit improve months after completing the program. However, most individuals begin to see noticeable improvement within about two years of completion,” Bergeron says.
While a DCP impacts credit, it's far less damaging than bankruptcy and provides a clear path to pay off debt and improve your credit long-term.
What Does a Credit Counsellor Actually Do?
Certified Credit Counsellors are trained professionals offering money management advice and debt relief strategies. At Credit Canada, our Credit Counsellors average 10 years of experience and are Certified Financial Counsellors (CFCs)™.
Responsibilities include:
Financial assessment. Reviewing your complete financial picture, including income, expenses, assets, and debts, to understand your current situation.
Budgeting guidance. Helping you create realistic spending plans that work with your lifestyle and income.
Creditor negotiation. Working with creditors on your behalf to reduce or stop interest rates and create manageable repayment terms.
Program support. Providing ongoing encouragement and guidance throughout your DCP, including free counselling.
The biggest warning sign to speak with a Credit Counsellor is if you’re considering a loan with a high interest cost to help you pay off your debt.
“While a loan can sometimes be a good solution to consolidate a few creditors into one payment, if the interest rate is excessive, it may not be your best option. Speaking with a Credit Counsellor can help—they’ll review your situation and evaluate all available alternatives to ensure you choose the most effective path forward.”
Who Credit Counselling Helps Most
Credit counselling works best for people who have:
A steady income
Moderate unsecured debt
Difficulty managing multiple creditors
A desire to repay their full debt at a lower interest rate
A preference to avoid bankruptcy
A willingness to commit to a structured plan
How Much Does Credit Counselling Cost?
All non-profit credit counselling sessions are free in Canada with no obligation.
If you enroll in a Debt Consolidation Program, there are two fees: a one-time setup fee of $50 and a small monthly administration fee. Interest savings often exceed these costs, and all fees are explained up front.
Credit Counselling vs. Other Debt Solutions
Whether you’re exploring bankruptcy, a consolidation loan, or a Debt Consolidation Program, it helps to see how each solution compares. This at-a-glance guide lays out the pros, cons, and credit impact of each solution.
Comparing Debt Relief Options (At a Glance)
Consumer Proposal
Bankruptcy
Debt Consolidation Program (DCP)
Debt Consolidation Loan
Best for…
Someone who has overwhelming debt, doesn’t qualify for a DCP or debt consolidation loan and needs legal protection from creditors.
When you have no other repayment options.
Someone who doesn’t qualify for a debt consolidation loan or has poor credit.
Someone who has a good credit score and income, and may qualify for lower interest rates.
Impact on Credit
High – reported as R7 or R9; formal legal process with less flexibility
High – credit score drops to the lowest possible rating (300) and stays on your record for 6-7 years from discharge
Moderate to High – reported as R7 or R9; voluntary, may be paid faster if finances improve
Low to Medium – payments made on time may improve credit, but missed payments will hurt your credit score
Risks
Becomes public record
Missing payments could nullify your agreement.
Limited access to credit until completion
Becomes public record.
Most severe credit damage
May lose assets
Missing payments could nullify your agreement
Not legally binding (creditors can withdraw)
Limited access to credit until completion
Requires good credit
Could lose secured assets if payments are missed
Debt could continue to be a problem if you don’t change your spending habits
Costs
$1,500 plus 20% of future payments. Future interest stops on debts included in the proposal
$1,800 minimum cost for first-time filers (can be split into monthly installments)
Surplus income charges may apply
One-time $50 setup fee, plus a small administrative fee included in your monthly payment
Interest is reduced to 0% or significantly lowered
Interest plus possible loan admin fees
Provider
Licensed Insolvency Trustee
Licensed Insolvency Trustee
Non-profit credit counselling agency
Banks and credit unions
Reach Out to a Credit Counsellor—We’re Here When You’re Ready
Credit Canada has helped over two million Canadians through free credit counselling services. You can get started by calling 1 (800) 267-2272 to speak with one of our certified Credit Counsellors for a free debt assessment. You’ll receive an honest, compassionate, and non-judgmental evaluation of your financial situation, as well as all debt solution options tailored to you.
If you prefer live chat to phone calls, you can also chat with Mariposa, our AI-powered debt management agent, to get personalized advice whenever it’s most convenient for you.
Ready to change your relationship with money? Check out Credit Canada GOLD, our financial coaching program for a more comprehensive solution to make sustainable, long-term changes. Rooted in behavioural science, this financial coaching program goes beyond traditional financial literacy to drive action and sustainable behavioural change.
Frequently Asked Questions
Does credit counselling hurt my credit score?
The initial counselling session involves only a soft credit check that doesn't hurt your score. If you enroll in a Debt Consolidation Program, your accounts receive an R7 or R9 rating, which affects your credit but is far less damaging than bankruptcy.
How long does the impact of a Debt Consolidation Program stay on my credit report?
When a person enrolls in a Debt Consolidation Program (also known as a debt management plan), the accounts included in the program are reported with an R7 or R9 rating for the length of the program and for two years after completion. This is less time than the impact of consumer proposals (3 years after completion) or bankruptcy (6-7 years after discharge).
Is credit counselling only for people with bad credit?
No. Credit counselling helps anyone struggling to manage debt, regardless of their credit score.
Can I negotiate with my creditors myself instead of using credit counselling?
You can try, but creditors are more likely to reduce rates when working with accredited agencies they have established relationships with.
How long is a typical credit counselling session?
A typical initial credit counselling session lasts about 60 to 90 minutes, giving enough time to review your finances and discuss available options.
How long does the full credit counselling process take?
The credit counselling process itself is relatively quick and is often completed in a single counselling session. However, if you choose to enroll in a Debt Consolidation Program, the repayment plan typically lasts 36 to 60 months, depending on your situation.
Is credit counselling really free in Canada?
Yes, all counselling sessions with a non-profit credit counselling agency are free with no obligation. Debt Consolidation Programs (DCPs) have small setup and monthly fees, which are transparent and often offset by interest savings.
Cathy Plowman • Author
Cathy is an accredited credit counsellor with 26 years of experience. She entered credit counselling with a mission to help people get out of debt and get back into life. She can help you consolidate your debts and create a livable budget that works for you.
Reviewed by
Himank Bhatia
• Education Lead and Credit Counsellor
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