Consumer Credit Counseling

Below we have compiled some credit counseling information and resources to help educate you on consumer credit and debt.
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What is Consumer Credit?


Consumer Credit is credit extended by merchants or banks to finance the purchase of consumer goods or services.


Know your Credit Score! Or Pay the Price...


Now, more than ever, it is absolutely essential that everyone who uses credit knows their Credit Score! In the past the only use for the credit score was to obtain new credit or qualify for additional credit. Today, many companies are using your credit score to determine other risks, besides credit risk. Employers are using credit scores to determine how reliable of an employee you will be. Insurance companies are using your credit score to assist in determining risk analysis. There has been a lot of discussion on if these methods are useful or ethical. One could make the case that credit scores have no influence on how well of a driver you are.
There are many services that will monitor credit for you and e-mail you when any new action has occurred on your credit report. Stay away from companies that couple there monitoring services with other services. For example, many credit card companies will offer a monitoring service. In my experience the best services are those that are independent. One of the best services is the one offered by equifax.

What are the most important things to know about your credit?

  • What is my credit score at all 3 credit bureau?
  • How many inquires are shown on my credit report?
  • Is there information on your credit report that differs from company to company?
  • Do you have any 30 Day, 60 day, or 90 day delinquencies?


Credit Counseling Checklist


Before deciding what consumer credit counseling agency to choose here are some things to think about:
  • What are the fees for the services being offered?
  • Are all services confidential?
  • Services tailored to for my situation?
  • Are the counselors certified?
  • Are education opportunities offered?
  • Are my funds be protected?
  • Agency is accredited?



    The Fair Debt Collection Practices Act


    To amend the Consumer Credit Protection Act to prohibit abusive practices by debt collectors.


    Credit Counseling Organizations


    For decades, many organizations have provided valuable credit counseling and education that assist consumers in putting their personal finances in order. The Internal Revenue Service continues to view organizations that counsel and educate consumers as qualifying for tax exemption under Section 501(c)(3) of the Internal Revenue Code.

    However, federal and state officials have become increasingly aware that as the market for consumer credit has undergone changes in the past 30 years, so have some of the entities that offer services to debtors. Many of these services do not provide meaningful education or counseling.


    Credit & Debt Statistics


  • The average American household has 13 payment cards, including credit cards, debt cards and store cards.

  • There are 1.3 billion payment cards in circulation in the United States.

  • Americans made $1.1 Trillion worth of credit card purchases in 1999.

  • Americans carry an average, $5,800 in credit card debt from month to month. If one were to make only the minimum payment on that debt every month, it would take 30 years to pay off - and include an additional $15,000 in interest.

  • According to the American Bankruptcy Institute, 302,829 people file for bankruptcy in the first quarter of 2000.

  • On average the typical credit card purchase is 112% higher than if using cash.

  • Over 40% of US families spend more than they earn. (Federal Reserve).

  • 96% of all Americans will retire financially dependent on the government, family, or charity. (U.S. Dept. of Health & Human Services)

  • Almost one out of every 100 households in the United States will file for bankruptcy. (from www.cardweb.com)

  • A 1992 Federal Reserve study showed that 43% of U.S. families spent more than they earned.

  • Only 2% of homes in America are paid for!

  • As of 1995 92% of U.S. family disposable income is spent on paying debts, up from 65% in 1975. [Federal Reserve]

  • For the year ending June 30, 1996, personal bankruptcies totaled more than ONE MILLION for the first time ever in a twelve month period. That is almost one bankruptcy for every 100 U.S. households.