Consumers find credit counseling to be one of the most confusing ?assistance? programs out there.
According to the National Foundation for Credit Counseling (NFCC), credit counseling agencies may be causing more confusion than they are doing good for consumers. Based on the findings of a recent NFCC survey, consumers often avoid credit counselors altogether because they do not know what a credit counselor can do to help or mistakenly believe that credit counseling will actually further damage their credit scores. The NFCC is naturally concerned by these findings, which it summed up in a public statement observing that ?when struggling with debt and other personal finance issues, consumers [are]?not seeking advice from a trusted professional nonprofit credit counseling agency?[1]. NFCC spokeswoman Gail Cunningham speculated that the source of the confusion lies in a lack of awareness about the different types of credit counseling agencies. She emphasized that ?NFCC member agencies are required to be accredited by an independent third party? as well as providing certified counselors that ?adhere to the NFCC?s stringent Member Quality Standards.?
The NFCC found that most of the respondents did not know which credit counseling agency could be turned to for assistance and that many believed credit counseling would be too expensive or hurt their credit scores. Also, many respondents thought debt settlement or bankruptcy were ?better or easier options.? Other additional surveys that the NFCC conducted in honor of Financial Literacy Month (April) indicated that 77 percent of consumers have financial worries despite 25 percent spending more than last year and that only four percent of Americans are presently worried about losing their homes to foreclosure[2].
Would you use a credit counseling agency? Why or why not?
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[1] http://nationalmortgageprofessional.com/news36964/credit-counseling-continues-cause-confusion
[2] http://www.prweb.com/releases/2013/4/prweb10588275.htm
Category: Personal Finance
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