Do Credit Counseling Programs Hurt My Credit Score? It has been a long time since we have had any serious discussion about the topic of whether or not credit counseling programs hurt my credit score. However, this topic has suddenly resurfaced in light of the recent mortgage mess that has hit the United States and the need to make some sort of positive change.
Credit counseling programs have the ability to improve a consumer’s credit scores within a very short period of time. The thing that gets people confused is that these types of programs are typically offered to consumers with the most severe credit issues. While this does make sense in the sense that people who have experienced some sort of financial crisis may need a little bit of assistance, it’s important to understand that people who have never had a problem in their credit history can find this type of service very beneficial.
When you look at the process of credit counseling, there are basically two aspects: One is debt consolidation, which is when you work with a credit counselor to consolidate all your debt into one low monthly payment. The other is debt management, which is when you make one single payment each month. If you’re paying a lot of different bills each month, then this is the way to go. Since this will allow you to be able to focus on paying for only one bill.
By paying on a single bill each month, you’re going to be reducing the chances that you’ll default on a loan and have your credit scores suffer due to not being able to repay the loan. Often the only method people can use restore their credit scores is dept consolidation and dept management.
Credit counseling has an important place in dept management. The reason is simple; if you’re going to work with a credit counselor, the counselor is going to help you set up a budget that allows you to be able to pay back the debt you currently have. On the other hand, if you are going to work with a debt management company, they are going to help you by creating a plan that helps you pay off your debt without using a credit card. This will result in you having a higher credit score over time, which is a good thing.
Another benefit to using a credit counselor and a credit counseling company is that you will be able to get lower interest rates. These companies are often times able to negotiate better terms with creditors on your behalf. This can actually help. Because lenders often times are more willing to lower interest rates when you are working with a company that works with your credit. A certified credit counselor instead of just using your debt management company. There are many ways that a credit counseling agency can help you rebuild your credit, and lowering your score.
There are a few different reasons why debt counseling can harm your credit score, but these things can be avoided. If you work with a reputable, experienced credit counselor, they are going to help you avoid spending money on unneeded fees that are going to increase your debt, and they are going to show you how to avoid spending more than you earn.
They are also going to educate you on what you can do to keep your debts from building up and how you can prevent yourself from getting into the same situation again.
If you’re ready to get your credit score back to a decent level, then there is no reason to let your credit fall further than it has already. Start looking into a debt counseling program, and see what type of help you can receive.