Debt Management
How Will the Program Affect My Credit Report?
People commonly think that going through
a credit counseling program will "ruin" the score on their credit report.
In fact, the opposite is often true - successfully completing a credit counseling
program can improve your credit rating. Here's why:
Better Payment History:
When you participate in our
Debt Management Program most creditors will bring delinquent accounts "current"
after receiving three consecutive payments arranged and paid through our agency.
The process may vary with each creditor and type of account.
Better Debt To Income Ratio:
About one-third of your credit score is based on your
credit card debt levels. Because debts are paid off years sooner through this program,
your debt to income ratio is reduced faster. This can improve your credit.
Rebuilding Credit: Members aren't allowed to use credit cards that are in consolidation,
until the program is completed. Once the debt is paid off, however, many lenders
will reinstate credit privileges for their members. In addition, members who are
proactive about rebuilding their credit may also be able to obtain mortgages and
car loans.
Important Note: Fair, Isaac Company, creator of the popular FICO credit score
that is widely used in lending and insurance decisions, does not take into account
the fact that a consumer has been in credit counseling when calculating the FICO
score.
