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Millions of Americans are facing significant financial disruption because of the coronavirus pandemic, whether it be lost hours at work or being completely laid off.
If you don't have sufficient savings set aside to get through these next several months, the best next step is understanding your options to try and keep your financial obligations on track.
To help you, the National Foundation for Credit Counseling (NFCC) is now offering a portal for people to call and receive free credit guidance from a nonprofit credit counselor.
Counselors are ready to help guide people through making their emergency credit card and student loan payments, as well as discuss their options for foreclosure prevention.
"Most credit counseling agencies are known for long-term solutions — this is not that," Bruce McClary, a spokesman for the NFCC, tells CNBC Select. Instead, the NFCC's new portal is designed to give people "a little bit of breathing room" with their budgets while we wait for the uncertainty to pass.
Below, we break down exactly what you need to know about accessing the NFCC's new free credit counseling portal.
There are a few types of people who could benefit from the NFCC's free credit counseling service.
You should consider it if any of the following circumstances apply to you:
- You are managing multiple credit accounts and not sure what to do.
- You were in good standing before the coronavirus pandemic and want to benefit from a payment relief plan in the short term.
- You're uncomfortable asking your creditor or lender for help or you just may not know which questions to ask and need some guidance.
McClary says that the new service will help people be aware of their relief options and be better prepared if they have to follow up with a phone call to their creditor.
He also adds that the type of people the NFCC is looking to reach with this service are those that would not normally reach out to a nonprofit credit counseling agency. "When they think of nonprofit credit counseling agencies, they think of the debt management plans that are more long-term," he says.
While this may be the case under normal conditions, this service is specifically meant to discuss short-term solutions for those set back financially from the pandemic.
NFCC counselors will walk you through short-term relief programs that are available during this time.
People who call will be advised on the payment deferment programs their specific creditors are offering, where those programs are available and how to activate them.
"In some cases, there is even direct assistance in getting those programs activated," McClary explains. If they cannot themselves start you off on a relief program, counselors at NFCC prepare you to make phone calls to your specific creditors. The counselors will provide you with detailed instructions on how you can then begin to activate certain relief programs.
For instance, if you are a cardholder of the Amex EveryDay® Credit Card or the Chase Freedom®, you may be interested in learning how you can have your credit card interest temporarily waived or your credit line increased.
People who call in can also receive assistance on how to put together an emergency budget "and all the things that you may need help with as you triage your financial priorities," McClary says.
You can access the NFCC's free credit counseling service either through their website or by calling 800-388-2227.
Note that the NFCC's coronavirus assistance webpage doesn't specifically call out student loan help, but McClary advises asking the counselor your student loan questions once connected and they should be able to help.
Unlike the long hold times you may have experienced trying to call your credit card company or lender, McClary assures that the wait time to speak to a credit counselor will not be as long.
"We are able to manage the capacity of call volume and of counseling sessions — and we are prepared to increase that capacity as demand increases," he says.
A phone call with an NFCC credit counselor will typically last about an hour for most people. McClary notes, however, that some cases may be more complex and take longer.
Because a counseling session involves explaining your certain circumstances, your budget and your financial obligations to your counselor, it's best to set aside at least a solid hour of your time when you call. This way, you'll be able to talk through all of the temporary relief programs you may qualify for and ask any questions.
Before you place a call to the NFCC, you should be prepared to talk about your overall financial circumstances and have the following information ready to go:
- Have a list of all your monthly household expenses (a budget is great) and your debts (think credit cards, car loans, student loans, mortgage, rent and utilities). This also may include debts to family or friends.
- Know the amount of income that you have, or if you don't have any income, how much savings you have set aside to get by through this time.
- Come ready to talk about any steps that you may be taking to restart your income streams, such as applying for unemployment or finding part-time work.
"If you have all those details, you can fly through that part of the conversation," McClary says. "And that helps you make the best use of that time, too, because then you can devote a bigger portion to talking about the solutions."
Information about the Amex EveryDay® Credit Card and Chase Freedom® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.