Credit counseling for those struggling
Rebecca Steele is the president and CEO of the National Foundation for Credit Counseling, the largest nonprofit financial counseling organization in the U.S.
NFCC offers services such as debt management planning, foreclosure prevention and home ownership counseling through its network of 600 offices nationwide.
What is credit counseling?
It starts with really listening to their situation and educating people on what their options are. Going through their budget: What is your income? What is your loss in income? What are your expenses?
We’ll work with them to really try to make their income balance their expenses and maybe even provide a little bit of savings.
If they can’t pay a credit card bill, we let them know what happens next. We want them to be aware of who’s going to be calling, what alternatives they have and how to talk to lenders, creditors and collectors. Because, you know, that’s really a big, scary thing.
How many people does NFCC serve?
We expect to see anywhere from 1.2 million to 1.5 million this year through our network. We expect next year to be much larger than that; our forecast is over 2.5 million, maybe upward of 5 million.
Has there been a change in demand because of the pandemic?
At the beginning of the crisis, we saw a spike in concerns and fear. We’re talking about hundreds of thousands of people calling to find out, ‘Hey, what do I do if I can’t make my payments?’
Very quickly, the government turned around with the CARES Act and provided really needed stimulus, especially for this lower income band.
Now what we see is that has leveled off and some of that (pressure) has begun to climb back up. We’re really, really concerned, especially with the fact that there’s just not a safety net.
How can a consumer distinguish between a good resource and one that’s not?
There’s no Good Housekeeping seal. There’s a lot of choices out there; it’s almost like you are entering into this wild, wild west and that’s really scary.
A couple things that I always say are: look online and make sure that the nonprofit credit counselor has a specific nonprofit, 501 (c)(3) designation. Make sure that it is legitimate. You should never be charged fees upfront. There are no fees for that counseling service.
If you had to give one piece of advice to people, what would it be?
If folks are struggling, I would say: Hey, just pick up the phone or contact a nonprofit credit counselor immediately. Have an initial conversation. Do your homework, but act now, because even though you might be able to pay all your bills today, something might happen as a result of this pandemic, whether it’s a second shut down or slow down or something else.