How to Know if You Need Credit Counseling
- Friday, July 13, 2012
What NFCC does
Each year, around three million people receive counseling and educational services from NFCC member agencies. Over one-third of all consumers who come to an NFCC agency for counseling are able to manage their debt on their own after receiving financial education and counseling.
NFCC’s success rate
Recently I spoke with Gail Cunningham of NFCC and asked her about NFCC’s success rate.
“In 2011, of the 2.5 million people NFCC counseled, one-third required only a number of counseling sessions to get them back on track,” says Gail. “Another one-third of that group required professional intervention by means of our debt-management program.”
The final one-third were found to be better served by someone else. These are cases that involve physical abuse, emotional issues, gambling and so forth, for which NFCC is not qualified or prepared to deal with. For this group, NFCC referred them to other social service agencies or to bankruptcy attorneys.
When pressed for a number, Gail responded that about 53 percent of those who come to NFCC seeking help go on to a successful completion, which means: Unsecured debt is 100 percent paid off, they’re back on their financial feet and confident that they will be able to manage successfully their finances on a budget in the future.
Effect on credit rating
What happens to your credit during counseling largely depends on how your lenders report your account to the credit bureaus. Some creditors report customers as delinquent on their bills until they make three consecutive payments of the new minimums negotiated by their credit services.
Being reported as late or delinquent can certainly hurt your credit scores, but a simple notation about credit counseling probably won't.
How to find
To be connected with a credit counselor that is certified by NFCC, go to NFCC.org and look for “Click Here to Begin.” Or call 800 388-2227 to be connected to the counselor closest to you.
© 2012 Debt-Proof Living. All rights reserved. Used with permission.
"Debt-Proof Living" was founded in 1992 by Mary Hunt. What began as a newsletter to encourage and empower people to break free from the bondage of consumer debt has grown into a huge community of ordinary people who have achieved remarkable success in their quest to effectively manage their money and stay out of debt. Today, "The Cheapskate Monthly" is read by close to 100,000 Cheapskates. Click here to subscribe.
Publication date: July 13, 2012
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