Credit Card and Consumer Counseling Success Rate.
Borrowers who have received financial credit counseling have improved their credit profiles and ratings during the following three-year period relative to other consumers who did not receive any help through counseling. This is according to a study released by Georgetown University, Washington, D.C based and the National Foundation for Credit Counseling (phone 1-800-388-2227). This is also supported by numerous other third party data.
Three years after the credit counseling process ended, delinquency rates experienced, which is measured by the reduction in 30- and 60-day delinquencies in the last 12 months, was substantially better for clients who were counseled. The study determined that it was much less likely for the individual to fall back into debt or to miss future payments.
What percentage of customers have success with credit counselors?
Many of those consumers who received counseling were also able to reduce the number of credit accounts they owned with positive balances. This helped reduce the number of bills they needed to pay on and therefore helped ensure long term success of the counseling. More than three-fourths of those clients with card debt reduced their use of their bank card credit limits and lowered their overall balances.
Counselors are also now pushing consumers towards credit card hardship programs. These are being offered by a number of banks and lenders. In most cases, there is no cost to enter into one, but the trick is in getting a company to offer it. The reason that these are becoming more common is that more credit card issuers and banks are willing to deal directly with consumers and provide them with relief on their accounts.
The bottom line is that your chances of having success in reducing your debts is much greater when you use a credit counselor, in particular those that are non-profit organizations. This data is provided by the study referenced above as well as the ProQuest Information and Learning Company.
Contact a credit counselor
As indicated above, credit counselors can increase the success rate that consumers have in improving their overall financial condition. A counselor can provide individuals with debt reduction services, budgeting tips, and general financial advice. But the bottom line is you have a much better chance in getting help and having success when using a counselor.
The good news is that many of the services offered by credit counselors are offered free of charge for income qualified individuals. So those that are truly struggling could truly benefit. Many other services are low cost or maybe they have a minimal fee associated with them. So the downside to using a counselor is very small, if there is one at all.
There are a couple different types of credit and housing counselors. It is recommended to shop around before signing up. One is a HUD certified credit counselor, who, while focusing on housing issues, can deal with other concerns as well. They focus on issues such as Mortgage Delinquency and Default Resolution Counseling, Financial Management/Budget Counseling, and Predatory Lending Education Workshops. Click here to find a free HUD foreclosure counselor.
The other type are more focused on consumer debts, budgeting, credit cards, bankruptcy advice, and medical bills. There are national non-profit agencies to call for advice and they can help people increase their success rate. For those people that like the more face to face contact, some organizations are more local. The non-profits will operate in every state. Find the listing of national non-profit credit counselors, and read how they can help you during a difficult period.