Your Economic Impact Payment was spent a long time ago, your work hours were cut, and your bills are getting harder to pay. Well, you are not alone. Widespread unemployment and economic hardships from COVID-19 are anticipated by financial experts to create a financial and credit crisis. My regular readers have already been alerted to the many scams out there to take advantage of vulnerable people. Those scams include “help” with credit and debt issues.
Good news! Reputable (and often free) help is out there to help with your pandemic credit woes. Here are three options for credit and debt counseling that really help:
- Nonprofit Credit Counseling
Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free financial education. Their counselors are certified and trained in consumer credit, money and debt management, and budgeting. They discuss your entire financial situation with you, and help you develop a personalized plan to deal with your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions. The Federal Trade Commission offers tips on finding an agency and questions you should ask before you start. https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor
- Credit Union Membership
Credit unions are nonprofit financial institutions, while banks are for-profit, meaning they are either privately owned or publicly traded. Credit unions have lower fees and are all about community. They often provide free financial wellness and other services to help their members make good financial decisions, stay on top of bills and payments, and manage a budget. Check out Bank Rate to find a credit union near you and how to become a member. https://www.bankrate.com/banking/best-credit-unions/.
- Community Development Financial Institutions
Community Development Financial Institutions (CDFIs) are banks and credit unions that focus on serving people in low-income communities that have historically been locked out of the financial system. Unlike other financial institutions, CDFIs rely less on credit scores when providing loans and other products. In addition, they emphasize developing long-term relationships with members of the community to help them gain financial literacy, establish savings goals, build credit, and access affordable loans. Check out the official CDFI website to locate a certified financial institution near you. https://www.cdfifund.gov/programs-training/certification/cdfi/Pages/default.aspx
Millions of people are suffering financial woes due to the coronavirus pandemic. If you or someone you know is impacted and needs help, nonprofit credit counseling, credit union financial wellness services, and CDFIs are some of the reputable resources that are out there for you. It might be difficult to take the first step, but that debt burden will feel lighter after you do.