I‘ve Heard That Credit Counseling Can
Negatively Affect My Credit Score, Can It?

Since the new bankruptcy laws were enacted, a multitude of new companies, services and promotions have emerged literally out of nowhere. More than anything, they have created a ton of questions and a lot of confusion. One of the questions people constantly ask is, “Will credit counseling negatively affect my credit score?” The answer to this question is important because it will help you determine if you are actually going to take the route of credit counseling.

Will Credit Counseling Affect My Credit Score?
As you have probably figured out by now, when it comes to addressing a debt problem, there’s a lot to learn and very little time to learn it in. That being said, I’m going to address a question more and more people are asking, “Will Credit Counseling Affect My Credit Score?” Prior to answering that question, I’m making a very broad assumption; that you have a grasp as to what credit counseling actually is.

What is Credit Counseling?
If you don’t know, here it is in a nutshell. When an individual is having trouble paying their debts or keeping up with their bills, they have a number of options if they take action as soon as they recognize they have a debt problem. One of those options is credit counseling. This involves enrolling in one of the many DMP’s Debt Management Programs and paying creditors through this plan. For a more detailed explanation go to: Credit Counseling.

Shortly after enrolling in one of the many DMPs Debt Management Programs, a comment stating that you are making payments through a credit counseling agency will appear on all three your credit reports. This comment is there to notify current creditors and potential creditors that you are under a debt management program.

Oh No – Not The Credit Counseling Comment?
That comment stays on your credit reports until the account is paid in full. Once you pay the debt management plan as agreed, you will most likely have to notify and petition the three primary credit bureaus to remove the comment. At that point, all of your accounts that were part of the plan will show paid as agreed and your credit score will reflect your timely payments.

As far as the comment hurting your credit score, it doesn’t seem to incite a slither of negative impact from any of the credit scoring agencies. Since 1999, companies such as the Fair Isaac Corporation have ignored these comments while calculating a consumer's credit score.

So the next question is, “How will potential creditors view the comments on my credit reports?” That depends on the in-house policy of each creditor. On one hand, some creditors may view a people enrolled in DMPs as too risky. On the other hand, some creditors will view the borrower as a good credit risk.

Joel Marks has been helping people get out of debt and avoid both bankruptcy and foreclosure for over fifteen years. Utilizing savvy debt counseling, debt management programs, Federal laws and a team of attorneys, debt counselors and advisors, he has quietly assisted thousands come from under the heavy burden debt. 

 Source: http://debterasure.com/