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Credit Card Applications » News » Other » Consumers Wary of Credit Counseling for all the Wrong Reasons

Consumers Wary of Credit Counseling for all the Wrong Reasons

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Consumers Wary of Credit Counseling for all the Wrong Reasons
May
1

Even if faced with a mountain of debt and difficulty paying it off, nearly three-quarters of the people polled in a recent survey said they would not seek out a professional non-profit credit counseling agency.

That’s according to the 2013 Financial Literacy survey by the National Foundation for Credit Counseling (NFCC). Why were people reluctant to ask for credit counseling?

Many reasons for not contacting credit counselors

While 22% said they were capable of resolving their own debt problems without help from outside, another 18% were overwhelmed with choices when deciding who to call.

Seventeen percent felt that credit counseling would be too expensive; 11% had never even heard of non profit credit counseling agencies; and 9% believed it might hurt their credit score.

Eight percent were embarrassed to talk about their financial problems with a stranger, and 6% felt that credit counselors only offer advice, not solutions. Others felt that bankruptcy or debt settlement was a superior option, or that their creditors would give them the best solution.

Myths and realities

The NFCC suggests that education about how they might be helped by a non-profit credit counseling agency might help bust some of the myths out there.

They also offer the following pointers:

  • Credit counseling is usually free or low cost. NFCC members cannot deny service based on inability to pay.
  • Credit counselors do not report to credit bureaus.
  • Credit counselors provide clients with short-term and long-term debt solutions, not just advice.
  • Bankruptcy and debt settlement both have serious consequences to consumers’ credit and are not to be undertaken lightly.

The survey asked 2,037 adults over the age of 18 about their financial habits and opinions. Questions were asked online in March 2013.

People can find a reputable credit counselor by checking with the Better Business Bureau and the state Attorney General’s office, according to the NFCC. Consumers in need of credit counseling can find an NFCC Member Agency by calling 800-388-2227 or going to www.DebtAdvice.org.

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