I have heard you mention credit counseling through the NFCC. There is an agency in my hometown. Can you tell me what kind of help they can give my husband and me? We have a large amount of credit card debt as well as equity line debt. We are paying our bills on time but can only pay minimums. Do they negotiate with the credit card companies on our behalf?
-Lisa, Alabama
Every year the NFCC assists over 3.2 million people who are struggling with their finances. For over 50 years, NFCC member agencies have offered free or low cost services (whether or not you’ll be charged for the help they provide depends on the member agency and the laws in your state) to those wanting to take control of their debt. The NFCC offers confidential help via phone (through their national toll-free hotline), online or in person.
Through credit counseling, the NFCC can help you to work towards paying more than the minimum amount on your bills. During a session, your counselor will address your credit issues and help you find ways to work towards solutions. “Adjusting the budget, decreasing spending and increasing income would be ways to find extra money to pay more than the minimum and get out of deep incredibly sooner,” says the NFCC’s Vice President of Communications Gail Cunningham.
If you’d like the NFCC to negotiate with creditors on your behalf, they can do that through a Debt Management Plan, or it’s commonly known, a DMP. A DMP is essentially a plan to help More…
I am curious about consumer credit counseling. Can you tell me how it affects your credit? Is it as bad as filing bankruptcy?
-Kelly, Oldsmar Florida
You’re right-using consumer credit counseling to manage your debts can potentially affect your credit score. What may surprise you, however, is the fact that when your score is calculated using the FICO scoring model, whether or not you’ve received counseling won’t affect your score. “Any notation on a consumer credit report indicating that the consumer is or has been involved in credit counseling is ignored by the FICO scoring model,” says CardRatings.com’s Curtis Arnold.
However, what you do with the advice you get from your consumer credit counselor is another matter. For example, if a counselor advises you to manage your debt or credit cards a certain way, and you follow through with that advice, it could potentially have a negative impact on your score.
One thing is for certain though; getting credit counseling will have much less of a negative impact on your credit than bankruptcy will. “The negative impact of credit counseling is fairly minimal, whereas a bankruptcy has HUGE negative implications. For example, according to Credit Counseling of Arkansas, your score can drop as much as 100 points if you file bankruptcy,” adds Arnold.
If you decide to move forward with credit counseling, a good way to start looking for help is through the National Foundation for Credit Counseling. The NFCC is a national, nonprofit network of counselors whose mission is to help you get out of debt. Through the NFCC, counseling is available by phone, online or More…
I read your student loan article in the Daily News and am very grateful for the information you provided. I have recently graduated with my doctorate in clinical psychology. In addition I have earned over $150,000 in loans. I don’t know where to begin. I believe I have private and federal loans but I’m not even sure to be honest with you. Is there anywhere I can get assistance with this? I seem to get bounced back and forth between the National Student Loan Data System and my school. The income based repayment plan sounds like a good option for me but I’m wondering if I should consolidate my loans first?
-Marissa, San Francisco, CA
You’re not alone. With everything that a goes along with college–the classes, the exams, the post-college job hunt–many students fail to pay attention to their loans until their caps have been thrown and the diploma is in their hands.
To get a handle on how much you borrowed and from where you borrowed, you’ll want to visit the National Student Loan Data System, which you mentioned in your question. NSLDS is the definitive resource for finding out about your federal loans. “The only caveat is if the school is a Direct Loan school they might not have finished reconciling their records with NSLDS,” warns FindAid.org’s Mark Kantrowitz. This could be the explanation for the complications you’re experiencing now. Private loans are another matter. You’ll need to get a list of the private lenders you borrowed from and call each to determine the loan amounts.
Once you’ve determined what portion of your loans are private and which are federal, it’s time to start looking at your options for repayment. If you’re doing any postdoctoral internships or residencies, income-based repayment may not More…
I’m sure you’ve read this news. Over the past weekend it was everywhere including in the Style section of the New York Times. Annie Leibovitz, photographer extraordinaire, she of the naked John and Yoko shot, of the pregnant Demi Moore shot, is in rough financial waters.
Why does this interest me? So many celebs of late have hit the financial skids — Lindsay Lohan, Lenny Dykstra, Stephen Baldwin — it reminds me of a finding in The Difference. When I looked at factors that held people back from financial success stubbornness was one. That is not difficult to understand. If stubbornness defines you, then you’re not likely to conform to whatever task the man (or woman…or corporation) asks you to take on.
The other, however, was more surprising, and it seems to apply in this case: Creativity. People who defined themselves as completely creative — not just very creative, or somewhat creative — but completely creative, were not likely to attain great wealth. Why is that?
David T. Robinson, finance scholar at Duke University and I mulled the research. And here’s where we came out. Sometimes very creative people More…
I have about $45,000 in credit card debt, should I payoff all my credit cards and cancel them at the same time? I’ve heard if you cancel the cards after paying them off it hurts your score.
-Nancy, Texas
Once you’re out of the red and have all your cards paid off, closing the accounts isn’t the best route to take.
If you close the accounts, there are a number of things that could potentially happen make for less than perfect financial circumstances. For one, you’ll be forced to use cash, checks or debit for all of your purchases. “They’ll lose access to the capital, have to live a cash or debit lifestyle, which is not as good as people make it out to be,” says Credit.com’s John Ulzheimer. Also, depending on how you cancel your cards, your credit score may take a hit, which will make it harder to obtain credit in the future for loans or other high ticket items.
If you have the ability to pay off the $45,000 in debt that you owe, my guess is that More…
