You are now successfully in a debt management program but you probably know others who could gain from your courage and success. How do you know when to suggest they seek help? If you think they may need credit counseling, here are some questions to help them decide:
Are you more-often-than-not late paying at least one of your monthly bills?
Are you unable to make the minimum payments on your credit cards?
Do you use cash advances from one card to pay another?
Have you found yourself avoiding calls from your creditors?
Have your own attempts to set up payment arrangements with your creditors been unsuccessful?
Credit Advisors Foundation can provide them with valuable education and services at any time, however, if they answered yes to one or more of the questions above, it may be time to seriously consider the credit counseling options available. Why CAF? Because CAF can help!
Credit counseling agencies
can provide you with valuable
Here’s the information you need to share with others: What to do first? Decide what needs to be accomplished. Get out of debt? Stop the calls? Create a budget? Knowing basic goals will help find the service that best fits these needs.
Tell them when they contact a credit counseling agency to find out what type of assistance is offered. Find a credit counselor who is accustomed to handling the type of debts they have, like mortgages, auto loans, bad checks, federal taxes, finance companies and of course, credit cards. Know that, unlike Credit Advisors Foundation not all agencies handle everything. Beware of agencies offering quick fixes. How long did it take the situation to reach this point? Solutions, in most cases, will not happen over night.
Does the agency have a not-for-profit status? (Yes, CAF!) Keep in mind that a non-profit status does not guarantee affordable fees. (Consider non-profit hospitals and the bills they send out.) Ask about fees and contributions. Once a member of a debt counseling program, how long does that agency hold money before funds are sent to the creditors? (15 days.) What happens to the first funds (payment or deposit) sent? (To the creditors!)
Ask specific questions about the counselors. Find out about their education and training. Are they certified credit counselors? (CAF counselors are!) Does the credit counselor evaluate the budget before suggesting solutions? (Yes!) Are fees and contributions considered within the budget? (Yes, Yes, Yes!)
Ask about benefits that are available from creditors as a member of a debt management program. Understand that these benefits are at the discretion of the creditor only and are subject to change without notice. Does the agency report to the credit bureaus? (CAF does not add any notations to your credit bureau.) Will and how, will credit counseling show up on a credit report? Will it affect the credit score? For example, First USA, now Bank One, will report an account as delinquent until three consecutive monthly payments at the approved new minimum amount are received. They will then list the account as current.
Others, like Citibank, add a note to the credit bureau listing that the account has been placed with a credit counseling agency. Once the program is completed and the accounts are paid in full notations are dropped. Know that Fair Isaac & Co, who developed the formula for determining credit scores that most creditors use, no longer considers notations of debt counseling in its calculations of FICO scores. The majority of creditors will work with counseling agencies in their attempts to resolve debt problems. Joining a debt counseling program notifies creditors that that there is a sincere desire to pay what is owed. They also know from experience that the likelihood of success increases dramatically in a debt management program.
What should be expected in a program? Be realistic! Do not expect to receive additional credit during the time in credit counseling. Many creditors will eliminate benefits if new debt is acquired. Do expect to learn about managing money and how to avoid similar situations in the future. According to creditors and consumers who have successfully completed a debt management program, the number one strategy is: STICK WITH IT! Number two? BE AN ACTIVE PARTICIPANT! Are monthly deposits to the agency made in a timely manner, so that the agency can send prompt payments to the creditors? Open statements from creditors. READ THEM. If there are questions talk to your counseling agency.
Credit Advisors Foundation supplies a client handbook-READ IT! Client handbooks can help to understand unfamiliar terminology and processes in a debt management program so that the right questions are asked to get the information needed to make more informed choices.
Most importantly, find an agency that fits. Work with this agency to accomplish goals to make a better, more financially sound future. Only the best from the client and the agency will help in becoming a credit smart consumer!