News : Consumer credit counseling may help uneducated parents regarding credit scores

source : debtconsolidationconnection.com
By Peggy Stillwell on May 7th, 2010

Many consumers may not know what affects their credit score, which may make it difficult for them to teach their children about proper financial management tactics.

According to a survey from ING Direct USA, 46 percent of respondents could identify no more than five of the 10 things that can lower a person's credit score. In fact, only five people of the more than 1,000 surveyed knew all 10 of the negative financial practices.

ING Direct USA chief executive officer Arkadi Kuhlmann said that parents who cannot identify the actions that can reduce a credit score may not be presenting a proper example to their kids.

"Also, parents could be overlooking some significant cost savings like lower interest rates that result by keeping their credit scores in check," Kuhlmann said. ...

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more debt consolidation news :
-Consumer credit counseling may help moms organize finances
-As students score low in financial literacy, consumer credit counseling may be option for education

Article : An Overview Of Consumer Credit Counseling

By LaToya Irby, About.com Guide

Consumer credit counseling is an alternative to filing bankruptcy. It is professional counseling that provides you with financial education and debt counseling according to your situation.

Once you consult with a credit counselor, the counselor will assess your debt level and work out a payment plan based on your income. Some credit counselors can negotiate lower interest rates and set up a debt management plan with your creditors.

How Credit Counseling Works

The credit counselor analyzes your credit situation including number of accounts, balance, minimum payment, balance due, and any past due account. The counselor then considers your monthly income and bills. Using this information, the counselor puts together a debt management plan (DMP) for paying off your debts. The proposed plan is sent to each of your creditors for approval.

Once your creditors agree to the DMP proposed by your counselor, you begin making payments to the credit counseling agency. The credit counselor disburses payment to each of your creditors in accordance with the DMP. In most cases, your credit accounts are closed to future charges as long as you are on the DMP.

Costs

A lot of credit counseling agencies claim to be non-profit. Even if the credit counseling agency says it’s non-profit, that doesn’t mean the services provided to you are free. In many cases there’s some kind of fee involved. Some agencies use your first payment to cover their fees, while others deduct a flat amount from your monthly payment. ...

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News : Congressman looks to change student loan bankruptcy, although debt consolidation may help as well

source : debtconsolidationconnection.com
By Angela Hawke on Apr 27th, 2010

Trying to fund higher education is a challenge many people face, as are the effects of not being able to pay off student loans in the long run.
One aspect of student loans that make them even more difficult is the fact that they are difficult to get rid of through bankruptcy. New laws passed in 2005 made all types of student loans harder to erase through filing, although a congressman is looking to change that.
Tennessee Democrat Steve Cohen, along with fellow party member and Illinois Representative Danny Davis, have authored a bill that would bring bankruptcy rules for student loans back to the way they were. In doing so, privately originated student loans would be treated the same as other forms of debt.
Cohen said that people should not be discouraged from getting further education because of the fact that it could lead to financial difficulties, and that his bill helps with that. ...

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more debt consolidation news :
-Free credit score law could help consumers, while debt consolidation can lower credit card bill
-Debt consolidation may be an alternative to questionable interest-rate reduction companies

News : Some willing to seek advice, such as services offered by consumer credit counseling

source : debtconsolidationconnection.com
By Peggy Stillwell on Apr 20th, 2010

A recent survey shows that some consumers may not feel too educated when it comes to dealing with their finances, although they are willing to look for help.

According to the poll from the National Foundation for Credit Counseling, 34 percent of respondents would give themselves a grade of C, D or F regarding their understanding of personal finances. The percentage represents more than 77 million people who may be in line for some additional assistance.

"Although the survey did show some improvements in consumer behavior as it relates to personal finance, there are still serious deficiencies which impact consumers' ability to properly manage their money, particularly during an economic crisis," said NFCC spokeswoman Gail Cunningham. ...

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News : Debt consolidation, consumer credit counseling options for improving finances

source:debtconsolidationconnection.com
By Marvin Milner on Apr 21st, 2010

When facing a troubling debt situation and dwindling finances, people may consider options like debt consolidation or consumer credit counseling.

In a recent piece for her website, personal finance expert Liz Pulliam Weston showcased a letter from a reader whose credit dropped after a foreclosure. Furthermore, the reader faced a reduction in salary after finding a new job and was curious as to how consumers in such a situation can start rebuilding their credit.

Pulliam Weston noted one option for consumers is debt consolidation. Through debt consolidation, people may be able to lower the amount of interest they pay on credit cards, which can help them get out of debt faster. ...

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Article : Can you really get a free credit report?

Consumer Credit Counseling Service
Apr,02. 2010

KNOXVILLE — A credit score is a vital component of overall credit health, and consumers should be proactive in learning what is in their credit report and how it may affect their score and their ability to secure credit. Consumers should beware, however, of misleading advertisements claiming offers of free credit reports that are a really a sales tactic to get consumers to purchase credit monitoring or repair services, sometimes for a hefty fee.

“Free credit reports, without strings attached, are available,” said Daru Burdge, president of Consumer Credit Counseling Service (CCCS) of East Tennessee. “Consumers need to know where to turn and not be enticed by online offers that promise free reports and then require them to sign up for programs and services that have a fee.”

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Description : Credit counseling

Credit counseling (known in the United Kingdom as debt counselling) is a process offering education to consumers about how to avoid incurring debts that cannot be repaid. This process is actually more debt counseling than a function of credit education.

Credit counseling often involves negotiating with creditors to establish a debt management plan (DMP) for a consumer. A DMP may help the debtor repay his or her debt by working out a repayment plan with the creditor. DMPs, set up by credit counselors, usually offer reduced payments, fees and interest rates to the client. Credit counselors refer to the terms dictated by the creditors to determine payments or interest reductions offered to consumers in a debt management plan.

source : http://en.wikipedia.org/wiki/Credit_counseling

Article : History of credit counseling

The first credit counseling agencies were created in 1951 in the United States when credit grantors created The National Foundation for Credit Counseling, or NFCC. According to W. Patrick Boisclair, Chairman of the NFCC's Board of Trustees, "the NFCC initially monitored legislative and regulatory activity for its retail credit members" and "also conducted public awareness campaigns on credit."(source) Their stated objective was to promote financial literacy and help consumers avoid bankruptcy, but they did not serve as collection agencies for the creditors. The first local credit counseling franchises emerged in the 1960's, offering education and counseling directly to consumers. NFCC is operated and the board of directors were major retailers, like JC Pennys and Sears, that used NFCC to act as a collection agency for bad debts.

In 1993, the “Association of Independent Consumer Credit Counseling Agencies,” or AICCCA, was founded, citing a need for “industry-wide standards of excellence and ethical conduct.” This formally organized the NFCC’s competition. The AICCCA was formed from the group of counselors who favored telephone delivery of debt management programs. The NFCC was, in the beginning, strongly opposed to this telephone business model, primarily favoring face-to-face counseling as a more effective solution. Eventually, all organizations practiced both phone and face-to-face processes with some agencies using large inbound call centers driven by mass media advertising.

The credit counseling industry’s third major trade organization is its largest: the American Association of Debt Management Organizations, or AADMO.

However, not all credit counseling agencies belong to a trade organization, nor are they required to do so; there are well over 1,000 active credit counseling organizations in the United States.

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made credit counseling a requirement for consumer debtors filing for Bankruptcy in the United States. In order to meet this requirement, during the 180-day period preceding the filing of bankruptcy, the debtor must complete a program with an approved nonprofit budget and credit counseling agency. Such a program may include, but is not limited to, one counseling session conducted by phone or over the internet. In addition, a post-filing debtor education credit counseling session is required in order to complete the bankruptcy process and to have your debts discharged.

Credit Counselling is also a growing industry in Europe, both for profit-making debt management companies and charities such as Christians Against Poverty and the Consumer Credit Counselling Service, Britain's largest debt advice charity.

source : http://en.wikipedia.org/wiki/Credit_counseling

Cautions regarding credit counseling (Canada)

The Financial Consumer Agency of Canada (FCAC) advises Canadians to do their homework about credit counseling services before entering into an agreement. According to the Agency, consumers should shop around and compare services of credit counseling bodies and take note of the different fee structures of for-profit and not-for-profit credit counseling, as well as what services are offered for those fees. Consumers considering entering into a DMP should also be aware that an R7 credit rating will be entered in their credit report and that their credit report will show that they used credit counseling, a notation that will remain on the report for at least two to three years. Prospective lenders, employers and landlords may view information in an individual's credit report, if the application forms consumers sign grant them permission to do so.

source : http://en.wikipedia.org/wiki/Credit_counseling