Finding a trustworthy organization to engage with when needing credit counselling, financial guidance, or assistance can be difficult for consumers. The National Foundation for Credit Counseling and the Financial Counseling Association of America are the two most prominent non-profit organizations, so search for their mark of approval to increase your chances of success. Both are watchdog groups that ensure their members act ethically. 1
What Does The National Foundation for Credit Counseling Do?
Founded in 1968, the National Foundation for Credit Counseling has become the preeminent and longest-running nonprofit association serving the credit counselling sector. The NFCC was founded in 1951 and is a go-to resource for those in need of financial counselling. 2
Depending on the nature of the issues they're facing, we'll put them in touch with the appropriate service provider. Furthermore, the NFCC promotes consumer interests in the interest of better financial education and services. 3
Affiliation For Credit Counselors
Individual counsellors employed by NFCC-affiliated organizations must become and remain NFCC-certified. To become a certified counsellor by the National Foundation for Certification in Counseling, candidates must complete a series of six tests. 4
The NFCC also offers other certification tests for areas of financial counselling that need specialist knowledge, such as student loans.
Once counsellors have earned their credentials, they must keep them current through additional training and recertification. This is not a one-time test. It's about making sure they have the right information on hand.
The American Economic Counseling Association: What Is It?
The Financial Counseling Association of America (FCAA) is the second-largest trade association in terms of membership. While the FCAA has only been around since 1993, it has already proven to be an invaluable resource for its member agencies and, by extension, consumers.
The FCAA's executive director told The Balance over the phone that to join the organization, a credit counselling agency "must adhere to our standards and best practices; need to show proof of accreditation by an independent third party and counsellor certification" This ensures that customers are dealing only with authentic, authorized businesses.
Recognition As A Qualified Credit Counselor
The FCAA is more accommodating than the NFCC, which mandates its certification curriculum for all agency counsellors. According to Pollock, "there are a few credit counsellor certification programs, and we allow any of those programs that the states have authorized." He said this opens the door for members to investigate potentially less expensive certification options.
How Might These Groups Affect Buyers?
The good news is that if a credit counselling firm is a member of either organization, it must follow rigorous standards and best practices. Especially when forbearance programs from the COVID era begin to expire, many low-income consumers may be experiencing financial difficulties for no credit vs bad credit.
Many people will soon be in serious financial debt. Is it wise to find out whether the firm you're considering hiring for assistance belongs to any of these groups?
Differences Between The NFCC and the FCAA
Both the NFCC and the FCAA have members that operate in every one of the 50 states, plus the District of Columbia and all of the territories. The two groups have worked together on a few business projects, most noticeably during the COVID-19 epidemic.
As a direct result of COVID, last year to bring everyone in the no credit history vs bad credit counselling industry together to solve difficulties and make sure some of the programs produced are equitably implemented and accessible." McClary also noted that the NFCC's ability to pass through financing to its member organizations was a critical distinction in its capacity to support counselling services.
Some, he explained, are "pilot initiatives" with a limited scope and a localized focus. Renter Advantage is one such program that helps NFCC members aid financially strained tenants. A $4.4 million grant funded the program.
Guide To Making Use of NFCC and FCAA Materials
Suppose you're on the fence about whether or not to seek financial counselling. In that case, the National Foundation for Credit Counseling or the Financial Counseling and Analysis Association of America are excellent places to start. In addition to locating local members, NFCC.org also provides a wealth of educational resources on bankruptcy, credit counselling, debt settlement, and the differences between these services.
The Conclusion
If you're considering debt counselling, you may get matched with a qualified service through either group. Do your research before committing to any financial counselling program, though. Keep an eye out for warning signs that an agency could be predatory when you conduct your research. Be wary of companies that want large sums of money upfront or make bold claims they can deliver on.
