Profina Gives Counselors Ability to Download Credit Reports
Profina Debt Solutions, an arm of credit counseling agency InCharge Institute of America, has formed a new partnership with one of the nation's major credit reporting bureaus to provide Profina's credit counselors with the ability to download and review key information from credit reports to improve the credit counseling for consumers who are seriously delinquent on their debt payments.
In the past, credit counselors have relied primarily on the information provided by the consumer to determine whether a debt management program is the most effective solution for relieving debt. Too often, the information consumers provide is incomplete or inaccurate, which can affect the quality of the counseling session, sometimes leading consumers into a debt management program unnecessarily, Profina said.
With the consumers permission, Profina counselors can now instantly access and review key pieces of information like 30-, 60- and 90-day delinquencies, account numbers and balances, total trade lines, total debt and credit limits.
"Information is power in being able to provide the highest-quality counseling and education," said Robert Barrett, president and chief executive of InCharge Institute. "No one else is currently offering their clients this level of effective counseling - I think we'll see a lot more of this in the industry in the future."
Profina executives believe the first point of contact by the consumer to a credit counseling agency is the most critical.
"This new advancement in counseling allows us to better understand the client's situation, and provide a more comprehensive counseling session. We can determine the best solution for our clients, the first time they call," said Robert Closs, president of Profina.
He said that for consumers, admitting they have a debt problem and being willing to find a solution is usually the hardest part. Once they have passed these milestones, turning them away to gather more information or access a credit report often makes a difficult situation worse.
Mr. Closs told Mortgage Servicing News that having the ability to download credit bureau data allow the counselors, who are called personal care representatives at Profina, to be more proactive in working with debtors.
That changes the dynamics of the counseling process. When a debtor calls, Profina will ask for permission to download the credit report. Profina's technology allows key data fields to be immediately populated into the credit counselor's computer screen. That eliminates a "little mating dance" in which the credit counselor has to ask for financial information about the consumer's debts at the beginning of the counseling process.
"We find that most of the people, when they get into a debt burden situation that drives a call to us, really don't know their whole financial situation." In addition, Mr. Closs said that the ability to download credit bureau data make it easier to monitor a debtor's financial condition over time.
In most cases, Profina counsels debtors who are in trouble because of unsecured credit card debt. He said that easy access to credit cards, coupled with a lack of education about managing debt and an "instant gratification" society has made it easy for consumers to get into financial trouble. Medical costs are also a potential source of trouble, Mr. Closs said.
In instances where a debtor is in danger of losing their home to foreclosure, the client is referred to other entities that specialize in mortgage forbearance, Mr. Closs said. He said the cash-out refinancing phenomena may become a challenge for credit counseling agencies, because more and more consumers are rolling credit card debt into their home loan. While that may help some consumers lower their monthly debt payments, financially troubled consumers should be cautious about this. "The concern we have for them is that if they don't change their behavior, what they'll likely do is convert their unsecured debt into secured debt and put their house at risk," he said.
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