Saturday, September 16, 2000

Class offers financial education

:Course could be first standard lesson

By Amy Higgins
The Cincinnati Enquirer

        If Mary Hurlburt had her way, taking a class in credit and debt management would be as necessary to getting credit cards as driver's education is to getting a driver's license.

        “Like they say, you're a better driver if you take driver's ed,” said Mrs. Hurlburt, credit educator at Consumer Credit Counseling Service of Greater Cincinnati. “And you're a better consumer if you take this course.”

        But little to no money education has led millions of American families to learn about finances the hard way: The average American family with a credit card balance owes about $7,000. The number of personal bankruptcies reached 1.35 million in 1997 — about eight times as many as during the Great Depression.

        But a new credit course is designed to change how consumers look at credit — and how lenders assess potential borrowers. Its goal is to become the standard credit lesson, the one the credit bureaus and lenders recognize and accept as the definitive and most meaningful credit course.

        The class — developed by Paul Strassels at the American Center for Credit Education — is called “Credit When Credit is Due” and is said to be the first standardized credit course in the country. It's taught locally by CCCS, a division of Family Service.

        Being a standardized course, its founders hope it is eventually recognized as insurance companies view driver's education courses: The more you learn, the less of a risk you are.

        “Conventional wisdom says the same theory applies to consumers who are borrowing money or asking for credit,” Mrs. Hurlburt said. “Individuals who successfully complete a national standardized credit education program should be better able to handle their finances and be better loan risks than those who receive no credit education.”

        That was the rationale of Don Jeffers, branch manager at Sharefax Credit Union in Evendale. He said the credit union turns down about one-quarter of it loan applications, largely because the applicants have bad credit or are overextended.

        And those people are into credit trouble because they never learned otherwise.

        “Our thinking is that you go through high school and college really with no class you can take that teaches you about money,” Mr. Jeffers said. “If people were educated in that aspect, they'll do a better job handling their money.”

        Sharefax is treating the four-week class as a prerequisite for people like David Hoskins to get a debt consolidation loan.

        Mr. Hoskins, 37, declared bankruptcy shortly after he lost his job when Swallen's home store closed. A new job cut his salary in half, but his lifestyle and expenses stayed the same.

        Mounting debt and unpaid bills forced him to lose his home in Mansfield, Ohio, and declare bankruptcy. He then moved back to Springfield Township to be closer to family.

        He's hoping the credit class gives him the knowledge and the credibility to straighten out his finances.

        “I'm trying to get back on my feet because my goal is to get a house,” he said. “I'm tired of making somebody else rich” paying rent.

        After he completes the class, Mr. Hoskins will be reimbursed the $50 he paid for the course booklet and be eligible for a debt consolidation loan and a car loan. He's enthusiastic about sending his wife through the course next session.

        Margaret Luehrs, 33, said she isn't looking for a loan necessarily, but better budgeting skills. She also recently lost her job, because of illness.

        Ms. Luehrs, who lives in Northside, said that she's already spending less money because the class teaches “tracking,” or recording each expense to better see what's being spend where. Even just writing down spending is making her think about each expense.

        She owns her car and her home, but doesn't want to fall further behind to a point where she needs to clean up her report.

        “That's one of the reason's I'm here: to keep the house,” she said.


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