by Tim St Vincent

With about 50 per cent of the working population struggling to pay their bills and stay on top of their debt, why is it that so few people seek out the professional assistance of a certified credit counsellor?

I don’t know. But I do have some ideas on the topic, so here are my Top 10 Reasons Why People Don’t See credit counsellors (in no particular order).

“I am too embarrassed by the trouble I am having,” often linked with “I don’t want anyone to know!” Don’t be embarrassed. I know, it’s more easily said than done. Just remember a few facts: 42 per cent of Canadians are stressed by their finances; 48 per cent of working Canadians say that if their pay was delayed just one week, they would have problems paying their bills. A staggering 50 per cent of Canadians say they live cheque to cheque. If half of the country is struggling with their debt, you’re in good company and have no reason to be embarrassed. We won’t share your information with anyone without your permission. So you don’t have to worry about anyone finding out that you came to see us for help. Everything is kept in the strictest of confidence.

“I don’t want my credit rating to be affected!” Seeing a credit counsellor does not impact your credit score. We offer a large variety of services that have no impact on your credit, from budgeting advice and preparation to workshops and webinars. If you decide to go into a debt management program (DMP), then, there can be an impact to your credit rating; however, if you are in a situation where a DMP is a solution that will help you, the impact to your credit score may not be that significant; the odds are pretty good that your credit score has already been lowered because of the pressure it has been under from your financial challenges. Over time, the successful completion of a debt management program will actually help your credit score.

“I don’t want an allowance; I don’t want to be told how to spend my money.” We don’t tell you how to spend your money. Period. We will work with you on a budget and help how to address any financial challenges you are having. We may make some recommendations and suggestions to you, but you are in control of the situation and the decisions made about your money 100 per cent of the time. You are in the driver’s seat and controlling things, not us.

“I don’t know how to budget; I am no good at it!” This is an easy one. Most of us aren’t good at budgeting – that is one of the many reasons why so many Canadians are struggling with their finances. Budgeting is part of a credit counsellor’s expertise; we will help you figure out how to budget and to set you up for success with your budgeting efforts. We have lots of tools and tips (and yes, if you want, Excel files too) designed just for you.

“It’s too expensive. They are just going to try and sell me something, and give me more credit to pay off old debt. It is just going to make things worse.” That is a very valid concern. Most of what we, and other non-profit credit counsellors can offer you is free. At the Credit Counselling Society we will not and do not offer loans or any form of credit as a way to pay off old debt. That can be like throwing an anchor to a drowning person! Not good. Our workshops are free, our webinars are free, our budgeting is free, our credit counselling is free. The only thing we charge a small fee for is if someone goes into a debt management program. (There is a $75 one-time set up fee, and a small monthly amount that varies by person.) Only about 9 per cent of the people who come to us qualify for a DMP and about 90 per cent of them complete the program and become consumer debt free.

You absolutely should be concerned if someone wants to charge you large fees up front before they do any work for you. I would also be concerned if a credit counsellor offered you more credit (a loan) to pay off old debt. To be clear, a consolidation loan can be a very good tool to handle and minimize debt. It is perfectly valid for a credit counsellor to suggest you see someone at a reputable financial institution to get a consolidation loan; the concern would be where the credit counsellor is trying to “sell” you a loan from their own company, or a related company. To me that is a profound conflict of interest and a sign of a major concern. A credit counsellor, in my opinion, should not be selling credit! I would immediately walk away from a situation like that!

Tim St Vincent is a retired CFP and is a Certified Educator in Personal Finance with the Credit Counselling Society, a non-profit organization. If you wish to contact the society for further information, assistance or to attend a webinar, please call 1-888-527-8999 or visit www.nomoredebts.org or www.mymoneycoach.ca.

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