Data Security
Made Simpler
Sponsored by
Introduction
C
redit can be a strong financial
tool to help consumers
and small business owners
manage their money. Effectively
managing credit requires a solid
understanding of some key credit
“Rules of the Road.” Borrowers
must understand the agreements
that they enter with lenders.
They must have a healthy dose
of personal responsibility, and
should establish patterns that
will keep them in good standing
with their creditors.
Most credit users understand the need to manage credit effectively, but they are not a “One Size Fits All” group. The needs and perspectives of credit users differ, based on their level of experience with credit and how large their out-standing balances are.
BBB created Managing Credit –Made Simpler to give customized credit man-agement guidance to different types of credit users, based on their specific needs and perspectives. Each of three customized versionsgive credit users the strategies and guidelines they need to take charge of their specific financial situation.
Select and open the version of Managing Credit - Made Simplerthat best offers guidance to fit your needs:
“NEW TO CREDIT”
Here are clear guidelines that will be helpful to consumers interested in securing their first credit card and man-aging a personal credit line for the first time. Having a good credit record may help you qualify for lower interest rates, and your credit record may also affect your ability to get a job, an apartment or affordable car insurance, among other things.
“BALANCING ACT”
If you have generally tried to manage your money well, but your financial situ-ation changed over the past year or two, this version may be for you. You may have been able to manage your new financial situation for a while, but mounting bills and limited resources have made you aware that you need to develop a new plan before your finan-cial situation gets worse.
“OVERWHELMING OBLIGATIONS”
This version offers advice that can help someone who needs to pay down high balances.
C
redit can be a great
financial tool to help
you manage your
money. It also requires
a solid understanding
of the agreements
you’re entering into
and what’s expected
of you, a healthy
dose of personal
responsibility, and
establishing patterns
that will keep you
in good standing
with your creditors.
When you’re new to
the world of credit –
especially in today’s
changing credit
marketplace –
it can be a little
W
e’re here to help.
BBB’s Managing Credit –
Made
Simpler
provides a set of clear guidelines that will
be helpful to most consumers interested in securing their
first credit card and managing a personal credit line for
the first time. Having a good credit record can help you
qualify for low rates if you’re about to apply for a credit
card, buy a car or are planning to buy a home in the
future. Your credit record can also affect your ability to
get a job, rent an apartment, get a cell phone, and even
find affordable car insurance. It’s important to build a
positive financial profile for yourself, whether or not
you’re planning to apply for a big loan in the near term.
Now is the perfect time to learn from this guide.
Banking regulations provide valuable protections to help
cardholders more effectively manage their outstanding
balances. We’ll show you how to take proactive charge of
your financial life so you can avoid credit problems.
I. Your Credit Report –
What Lenders are Looking For . . . 2
II. Your Credit Score & How It Can Affect You . . . 3
III. How to Build a Good Credit Record . . . 4
• Keeping an eye on your credit report
• More suggestions
IV. Credit 101 . . . 6
• APR – Explained
• How to minimize your APR payments
• Deciphering your monthly statement
• Choosing the right kind of card for you
V. Smart Steps to Avoid Credit Trouble . . . 10
VI. Protect Yourself from Fraud . . . 11
Addendum . . . 12
Frequently Asked Questions . . . 13
Topics We’ll Cover:
I. Your Credit Report –
What Lenders Look
For
Y
our credit report and credit
score are key tools that
meas-ure your financial risk, giving
lenders a way to predict how likely
you are to pay your bills on time.
Many lenders — and others — use
your credit score to help determine
whether or not to give you a line
of credit. Creditors don’t just look
at one or two things — they look
at several things that ultimately
come together to build a financial
profile of you, such as:
oYour monthly and annual income. oYour monthly payment obligations —
Includes rent, student loans, medical bills, car payments, utilities, tele-phone/cell phone/cable, etc. oAre your financial obligations in line
with your total income?
oAre your monthly payments in line with your monthly income?
oDo you pay your bills on time? Late payments, defaults and other repay-ment issues can remain on your credit report for up to seven years.
oDo you have outstanding traffic or parking tickets or other government-issued citations?
oDo you have any kind of credit history? oHow many credit cards have you
applied for in the last few months? oIs there a record of a collections
agency being hired to pursue you for outstanding payments to creditors?
Potential lenders find this information in your credit report, which is updated on an ongoing basis with new information. A third party — such as a credit issuer, prospective landlord or prospective employer — can secure your credit report when they have a “permissible purpose” under the law. They will find your credit report by going to one — or all — of the three major credit reporting agencies:
www.equifax.com www.experian.com www.transunion.com
II. Your Credit Score
& How It Can
Affect You
Y
our credit score is based on
key types of information in
your credit report, which come
together and generate a
compos-ite credit score. The key thing to
remember —
the higher the score,
the better
. There are several types
of credit scores, but lenders often
use the FICO score.
The score ranges from 300 to 850 and can vary slightly based on which credit agency issues the score.
Your FICO score generally measures five key criteria:
oLength of credit history oTypes of credit lines
oPayment history on those credit lines oAmounts owed on those credit lines oNew credit lines — how many and over
what period of time
III. How to Build
a Good Credit
Record
I
f you’re new to credit, many of
these criteria may not yet apply
to you. Even if that’s the case, it’s
important to keep them in mind
as your build your credit history.
Here are some suggestions to
get started:
oApply for your first credit card. This might be a general bank card, a department store card, or a gasoline station card.
✓ However,don’t apply for too many credit cards in a short time period (6-12 months). The number of credit applications you submit — even for retail store cards — may show up on your credit report and can be a red flag to potential cred-itors. Any red flag may cause them to deny your application or charge you a higher interest rate on your credit line.
✓ Opening several lines of credit may also lower your credit score, because may reduce the “average age” of your accounts — a key criteria in determining your credit score.
oIf you have trouble qualifying for a credit card:
✓ Contact your bank and ask what you can do to get a credit card. One possible option the bank might suggest is to issue you a card with a low credit limit that you can gradually increase as you show that you can pay your bills on time.
✓ Another possible option the bank might suggest is to apply for a Secured Card. This product requires you to deposit a certain amount of money into a savings account before you can use the credit card [it’s basically like a security deposit].
Most banks that offer secured cards match your credit limit with the amount of money you’ve deposited into the account. As you build a strong track record with your bank over time, you can request an application for a general purpose credit card.
BBB Tips
Getting Your First Credit Card
Shop around before applying for a new credit card. Different banks, department stores, gas stations, etc. offer different interest rates and different payment terms. Choose a card that offers the best interest rate and payment terms you can find.
‘Secured Cards’
A bank-issued “Secured Card’ can be a great way for a new borrower to start building your new credit profile. But you need to be mindful of potential fees some banks charge for this product — such as an appli-cation fee, a processing fee, and an annual fee.
Stick with lenders that charge low fees and give you the option to upgrade to a non-secured card.
5
Keep an Eye on Your Credit
Report
As you take some specific steps to build a positive credit track record for yourself, you also need to keep a watchful eye on your credit report from each of the three major credit report-ing agencies, and examine the elements within each of the reports. This is the best way to make sure that it’s accu-rate. Catch — and correct — any poten-tial errors, and be on the look out for fraudsters who open accounts in your name, and then don’t pay the charges they accumulate.
oA federal law allows you to request a FREE COPY of your credit report from each of the credit bureaus once every 12 months at this website
www.annualcreditreport.com. This is the only free resource to get a copy of your credit report from each of the three credit reporting agencies once a year.
oIf you find any mistakes on your credit report, you should contact eachof the three credit reporting agencies to report the errors, and start the process to correct them.
www.equifax.com
www.experian.com
www.transunion.com
Additional Suggestions
oPay your bills on time. The later you are, the more points you may lose on your credit score.
oKeep your credit card balances low– ideally less than 25% of your credit limit at any time, even if you pay off your bill in full every month. If you start getting near your credit limit, this can be a flag to potential lenders, suggesting you’re maxing out your cards.
oPromptly pay any traffic or parking tickets or library fines (and keep records of the payments). If the bill ends up going to a collection agency, your credit score could drop by as much as 100 points.
BBB Tip
Automatic Payments
Consider activating an automatic electronic payment schedule with your bank, so you’ll never be late for a payment.
NOTE– Minimum payments may vary, so look for the minimum payment percentage for each of your lines of credit.
It’s always a good idea to have the automatic payment pay much more than the minimum. You’ll owe less in interest and can pay down your balance much faster.
!
BBB Alert
BBB urges caution about any company that advertises a “free” credit report.
Generally, these offers aren’t truly ‘free,’ because you need to sign up and pay for other services in order to get your ‘free’ credit report.
IV. Credit 101
P
ut simply, a credit card
provides a short-term loan
from a bank that you are
expect-ed to repay quickly. In exchange
for giving you a short-term loan,
the bank will charge you interest
– often referred to as an
Annual
Percentage Rate
or
APR
. An
issuing bank will evaluate your
credit-worthiness and determine
if you are a low risk candidate
(likely to repay) or a high risk
candidate (unlikely to repay)
for a line of credit, and will offer
you an APR based on your credit
report and how it profiles you
financially. Some banks will offer
you a “Teaser” APR — essentially
a low introductory rate that
will change to a higher APR six
or more months later. We’ll
provide some guidance about
this concept below.
APR – Explained
APR works in lock-step with the trans-actions you make on the credit card… if you don’t pay off your balance each month.
oIf you don’t pay your balance in full every month, and carry some of that balance forward to the next month, you will be charged interest on the unpaid balance. The amount of money you pay in interest is directly tied to your APR.
✓ You’ll pay less money in interest if you have a lower APR and keep a low outstanding balance.
✓ You’ll pay more money in interest if you have a higher APR and carry a high outstanding balance. oAPR can be ‘variable’ {subject to
change on a monthly or quarterly basis} or ‘non-variable’ (may change with prior notice from the issuing bank; issuers can increase rates on future transactions with 45 days notice). Be sure to understand if the issuing bank is offering you a variable or non-variable APR, as it will directly affect your interest payments each month.
oA card offering an introductory “Teaser” rate can be an attractive option…as long as you fully under-stand what the higher APR will become and when it will activate. Teaser rates must last at least six months before the introductory offer expires.
BBB Tip
Teaser Rates
7
oThe APR can also be different on different transactions. For example, the APR will be higher on a Cash Advance than on a regular purchase. oGenerally, issuers can only increase
your APR on existing balances if your payment is more than 60 days late; however, your original rate must be restored if you make the next six consecutive payments on time. Note: lenders are required to apply your payment to the highest rate first — so if you have a $5,000 balance and $1,000 is at 18% and $4,000 is at 10%, for example, if you make a $1,000 payment, it must first be applied to the 18%..
How to Minimize the Amount of
Interest You Pay
Here are some strategies that can help you reduce your APR interest payments, so you can pay off your balance faster. oFind a lender that will give you the
lowest possible APR on an ongoing basis. A lower APR translates into lower interest charges as a percentage of your outstanding balance.
oMake the highest possible payment you can against your balance each month. The lower the unpaid balance you carry forward, the less you’ll pay in interest payments…and the faster you pay off your balance (if you don’t make additional purchases).
Deciphering Your Monthly Statement
Knowing how to read your monthly credit card statement – and understanding the key terms you will find on it — will help you responsibly manage your account. Here are the key things you need to know.
terms WhAt it meAns smArt Advice
APR (Annual Percentage Rate) The annual interest rate you are charged on Keep an eye on the APR each month. If it your unpaid balance. You may have several goes up, ask your bank why….and
different rates; for example, one rate for new consider shopping around to see if you purchases and another rate for balance can get a better APR offer.
transfers.
Available Credit Line The amount of unused credit available. • Do not view this as a license to go spend more. Remember, you need to pay for what you buy.
• Try to keep your purchases below 25% of your total credit limit.
Cash Advance Limit The amount of cash your card issuer is • Do not view this as a “CASH AVAILABLE making available for withdrawal against your TO SPEND” sign. The APR on Cash
credit line. Advances is generally higher than on
purchases.
• View it as an “Emergency Fund.”
Finance Charge The interest and other fees assessed by the Whenever possible, pay the entire balance bank to finance your unpaid balance. This due every month to avoid finance charges. charge is directly tied to your APR. If you can’t pay off your balance each
month, pay as much as you can to minimize the finance charge assessed on your out-standing balance.
terms WhAt it meAns smArt Advice
Minimum Amount Due The smallest payment you can make (by the Get in the habit of paying off your balances due date) to meet the terms of your card every month…or at the very least paying as
agreement. much as you possibly can. This will
minimize your interest payments. New Balance Total amount you owe, based on when the Whenever possible, pay off the entire
current Statement Period closed. balance every month. If you can’t, make the largest payment you possibly can.
Past Due Status of your account when the minimum oDon’t miss a payment deadline. This payment is not received by its due date. could result in a:
✓Increase to your APR and
✓Negative entry on your Credit Report. oConsider activating an electronic payment
schedule with your bank.
Payment Due Date Date your payment is due. oMark your calendar to pay your bill at least 5 days before the due date, to be sure the payment is processed by the deadline.
oOr consider activating an electronic payment schedule with your bank. Periodic Rate The interest rate for a particular subdivision Calculate the monthly interest rate against
of the year (a monthly periodic rate is 1/12th your total monthly purchases. This will
of your annual interest rate). show you how much you will pay in interest charges that month…which can be a powerful incentive to pay off as much of your balance as possible.
Post Date Date that a purchase, cash advance, fee or Track your purchases and their posting date payment is recorded by the card issuer. against your purchase receipts to make sure
they match.
oIf you see a purchase you don’t recall making on that date, investigate it further. This is one way to catch potential fraud.
oYou may find out that you just forgot making that purchase on that date… but you won’t know that unless you investigate it.
Total Credit Line/Limit The total amount of credit and the limit your Try to keep your purchases below 25% of card issuer has given you. your total credit limit, which can help
improve your credit score. (FICO)
9
Choosing the Right Kind of Card for You
Understanding credit card features, benefits and tradeoffs will help you choose the right kind of credit card program for your needs. Here are some of the most common features and benefits.
credit card Feature Key Benefit things to consider Before choosing this type of card
Secured Card Small credit line that requires an up- oMay have Fees – possibly an Application Fee and/or an front cash deposit from you, which Annual Fee. Inquire.
will be matched by the bank. oAPR might be higher than a traditional card. Inquire. oRequires a minimum cash deposit from you
Reward Card Can accumulate points or miles — oMay have an Annual Fee. Inquire.
which can be redeemed for oAPR might be higher than other types of cards. merchandise, airline tickets, cash, Inquire.
charitable donations, and many ✓ If you plan to carry a balance, you’ll generally pay other items — based on the total more in interest costs.
dollar value of the transactions ✓ If you plan to pay off your balance every month, a on that card. higher APR may not be a concern to you relative to
the potential rewards.
Shop around for the best deal. Consider both the number of miles/points you’ll earn per dollar spent and the redemption requirements and match against your shopping behaviors to make sure you find a rewards card that works for you.
Co-branded or Offer two types of benefits: oMay have an Annual Fee. Inquire.
Affinity Card o Customer-focused Benefits oAPR may be higher than other types of cards. Inquire. Offers special rewards to card ✓ If you plan to carry a balance, you’ll generally pay holders, which can be redeemed more in interest costs.
with the partnering organization. ✓ If you plan to pay off your balance every month, a Rewards are based on higher APR may not be a concern to you relative to accumulated points from dollar the potential rewards.
transactions.
o Partner Organization-focused
Benefits
Offers cash to the partnering organization — generally a non profit — based on a percentage of your total annual transactions.
Cash Back / Rebate Card Offers cash-back rewards based on oMay have an Annual Fee. Inquire.
the total accumulated dollar oAPR may be higher than other types of cards. Inquire. transactions on that card. oCash back offers can help offset your APR (if you carry
a balance) and other fees that may be associated with the use of that credit card.
Introductory or Offers a very low APR for a defined Read the card issuer’s terms carefully to know exactly “Teaser Rate” APR Card period of timewhen the card is first how long your introductory APR will last, and what it will
issued. APR then increases at the increase to when the introductory period expires. predetermined time.
V. Smart Steps
to Avoid Credit
Trouble
oSet up a household budget to monitor and guide your spending patterns. Look at your total monthly income and expenses. If your expenses are too high compared to your income, it’s time to find new sources of income, cut your expenses…and sometimes both.
oBuild an emergency fund. Keep three to six months’ worth of expenses in a money-market or savings account that you can access easily. Having that extra money available can help you avoid building up high-interest credit-card debt if you end up with unexpected expenses. Keep this money separate form your checking account so you don’t raid it for your regular bills.
oCorrectly prioritize your payments. Pay your rent or mortgage and high interest rate balances first. If possible, transfer a balance from one credit card to another card with a lower interest rate.
oMake extra payments whenever possible. Extra payments can dramatically shorten the time it takes to pay down a balance, and will save you money on interest charges. oCut back extra expenses. Be honest
with yourself and identify the things you are buying that might really be ‘discretionary,’ and then commit to a personal plan to eliminate them or trim them back. Over a span of weeks and months, those amounts can add up to a considerable amount.
oAutomate your payments and/or set up monthly reminders. Consider activating an automatic electronic payment schedule with your bank, so you’ll never be late for a payment. NOTE – Minimum payments may vary, so look for the minimum payment percentage for each of your lines of credit.
It’s always a good idea to have the automatic payment pay much more than the minimum. You’ll owe less in interest and can pay down your balance much faster.
VI. Protect Yourself
from Fraud
Y
ou
are your own best line of
defense to protect yourself
from credit card fraud. Here’s
how.
oSign your card immediately when you receive it in the mail.
oCarry only the cards you expect to use, and keep them secure.
oSecure — in your home — other cards you may not regularly use.
oKeep a list of account and telephone numbers for your card issuers in case your cards are lost or stolen. Once you report the loss or theft, you will not be liable for unauthorized charges. oKeep a copy of this list both at
home and at your work.
oNotify your card issuer/s in advance if you have a change of address. oNotify your card issuer/s in advance if
you plan to travel outside the US and use the credit card.
oBe very cautious about giving anyone your account number.
oDo not give your cards to anyone. oKeep your pass code and personal pin number secure. Do not put it in writing…and do not share it with anyone.
oUse only reputable companies with secure websites for online shopping. oEmail is not secure. Never include
your credit card number (or Social Security Number) in an email. oShred all paper documents
contain-ing your personal identifiers (account number, name, address) before disposing.
oWhen you are expecting a new or replacement credit card or debit card, look for it in the mail.
oReport a lost or stolen credit card or debit card immediately.
11
BBB Tip
Indicators of a Secure Web Site
Look for well-known seals…and then roll your cursor over the seal to see if it’s active and clicks through to the seal-issuer.
Common online seals of authenticity or security include (among others) oBBB Accredited Business oYahoo Merchant
oVerisign-secured oTRUSTe
oMcAfee-secured
!
BBB Alert
Card-issuers will never call or email you, asking you to ‘verify’ your account information.
They already have it.
Ignore any threats or expression of urgency you receive by phone or email,indicating that your account will be de-activated if you do not respond immediately and ‘verify’ your information.
Addendum
CREDIT CARD ACCOUNTABILITY,
RESPONSIBILITY AND
DISCLOSURE ACT OF 2009 –
(“Credit CARD Act”).
The Credit CARD Act represents a fun-damental change for the credit card industry, marking the beginning of a new era of consumer empowerment. Signed into law in May 2009, the Credit CARD Act provides consumers with protec-tions from unfair practices such as unex-pected interest rate increases and ensures better disclosure of credit card terms and fees. Understanding these dis-closures can make it easier for you to manage your credit wisely – helping you to meet your payment deadlines, avoid late fees, and know in advance if your interest rate will be increasing giving you plenty of time to plan ahead and make an extra effort to use cash and/or opt-out of certain terms.
What the Credit CARD Act Means
for Consumers:
oYour interest rate will be honored for one year after you open an account. However your rate can be increased:
✓ if your card has a variable interest rate (if the index goes up, so can your rate)
✓ if you are more than 60 days late in paying your bill
✓ if you are in a workout agreement and you don’t make your payments as agreed
oIntroductory rates will be honored for at least six months, after that your rate can revert to the "go-to" rate (the rate must be clearly disclosed when you first get the card).
oBanks will not charge you a fee if you exceed your credit limit…unless you agree in advance to “opt-in” and pay the fee in return for the flexibility to exceed that limit.
oBanks will provide at least 45 days notice before increasing your interest rate, changing certain fees or making any other significant changes to the terms on fixed-rate cards.
oBanks will honor your interest rate on an existing balance, unless your minimum payment is at least 60 days overdue. If this occurs — and you pay on time for six months in a row — your previous rate will be restored. oBanks will no longer charge interest
on balances you paid on time the previous month. (No double-cycle billing)
oBanks will no longer raise your interest rate just because you missed a payment deadline with another lender. (No universal default.) oBills will be sent at least 21 days
13
Frequently Asked
Questions
How does a potential credit issuer use a credit score?
Many lenders — and others — use your credit score to help determine whether or not to give you a line of credit. Your credit score can also affect your ability to get a job, rent an apartment, get a cell phone, and even find affordable car insurance.
What goes into creating a credit score?
The most commonly used score, called the FICO score, generally measures five key criteria:
oLength of credit history oTypes of credit lines
oPayment history on those credit lines oAmounts owed on those credit lines oNew credit lines – how many and over
what period of time
In addition to looking at a credit score, what do creditors look for on a credit report?
They look atseveral things, which ultimately come together to build a financial profile of you. This can include:
oYour monthly and annual income. oYour monthly payment
obligations…including rent, student loans, medical bills, car payments, util-ities, telephone/cell/cable bills, etc. oAre your financial obligations in line
with your total income?
oAre your monthly payments in line with your monthly income? oDo you pay your bills on time? oDo you have outstanding traffic or
parking tickets or other government-issued citations?
oDo you have any kind of credit history?
oHow many credit cards have you applied for in the last few months?
How do I know if what’s on my credit report is accurate? And what do I do if I find out there’s a mistake on it?
A federal law allows you to request a FREE COPY of your credit report from EACH of the three major credit bureaus once every 12 months. The only free resource to get a copy of it is at
www.annualcreditreport.com.
If you find mistakes on your credit report, you should contact each of the three credit reporting agencies to report the error/s, and start the process to cor-rect them.
www.equifax.com www.experian.com www.transunion.com
I like having several credit cards to choose from – especially retail store cards. Is there anything I should be aware of with that?
Yes – two things to be aware of. a) The number of credit applications you
submit – even for retail store cards – may show up on your credit report and can be a “red flag” to potential creditors. Any red flag may cause them to deny your application or charge you a higher interest rate on your credit line.
b) Opening several lines of credit may also lower your credit score, because it will reduce the “average age” of your accounts — a key criteria in determining your credit score.
What can I do if I have trouble qualifying for a credit card?
There are two possible things you can do:
a) Contact your bank and ask what you can do to get a credit card. One pos-sible option the bank might suggest is to issue you a card with a low credit limit that you can gradually increase as you show that you can pay your bills on time.
b) Another possible option the bank might suggest it to apply for a Secured Card. This product requires you to deposit a certain amount of money into a savings account before you can use the credit card. Most banks who offer secured cards will then match your credit limit with the amount of money you’ve deposited into the account. As you build a strong track record with your bank over time, you can request an applica-tion for a general purpose credit card.
What can trigger the bank to increase my APR?
There are a number of things that can trigger an increase in the APR, but the most important one that you should guard against is missing a payment deadline.
What is a “Teaser” rate on a credit card?
A Teaser rate is the same thing as an “Introductory” rate, which is a lower APR designed to attract credit applicants. Teaser rates last for a set period of time (all must be honored for a minimum of six months), and then the rate will
How can I protect myself from fraud-sters attempting to trick me into divulging my bank or credit account information?
Your bank will never call or email you for the purpose of “verifing” your account information. They already have it. Also…ignore any threats or expression of urgency you receiveby phone or email, indicating that your account will be de-activated if you do not respond immediately and “verify” your informa-tion.
I’m behind on my payments, and I’m uncertain if I can catch up on my own. What do you suggest?
oFirst, call your lender/s directly,by calling the issuing bank’s customer service line. Ask to speak to someone who can explore some repayment options with you. When you get the right kind of banking representative on the line:
✓ Focus on what you can do. Be prepared to share some ideas. Sometimes a small change can make a big difference, such as asking to shift your due date to a better time of the month if you’re frequently struggling to make your payments just before your payday.
✓ If your issuing bank tries to contact you – respond, and have this type of conversation. Don’t be afraid to talk with the bank, which may be able to make some changes that could make it easier to pay off the debt.
oMake an appointment with a rep-utable credit counseling agency,if your attempts to negotiate with your
How do I find and work with a reputable credit counseling agency?
Interview several agencies.
If you know someone who has used such an agency in the past, ask them for a recommendation. Or, ask friends
relatives who they would consider if they needed budgeting advice. You can also find credit counselors in the Yellow Pages, by contacting the National Foundation for Credit Counseling (http://www.nfcc.org) or the Association of Independent Consumer Credit
Counseling Agencies (http://www. aiccca.org) for a list of members or by using an Internet search engine. Further, The CARD Act mandates that issuers provide three licensed and Government approved credit counseling agencies or a toll-free phone number that provides that information on each statement.
What are some good signs of a reputable credit counseling agency?
Here’s a list of seven (7) criteria to look for / ask about.
1. Recognized as a non-profit by the IRS. 2. Required to maintain all proper
licenses.
3. Provides review of customers’ income and debts, along with a written plan for reducing and eliminating debt. 4. Disperses the proper payments to creditors at the proper times — typically twice a month.
5. Provides clients with written statements at certain intervals.
