Debt Kit -- Settle unsecured debts for less than half of amount owed Credit Kit -- Improve your credit rating and reduce monthly payments by $200+ |
Credit > Will Credit Counseling Hurt My Credit Score? |
Will Credit Counseling Hurt My Credit Score? Until very recently, the company that calculates your FICO credit score, Fair Isaacs, included enrollment in credit counseling as a factor that lowered one's credit score. However, their research told them that enrolling in credit counseling had no effect whatsoever on determining whether one was a good credit risk or not, so they removed credit counseling from consideration. Therefore, the answer to the question, "will enrolling in credit counseling lower my credit score" is no, it will not. A notation on your credit report that you are in credit counseling will not lower your FICO credit score. However, that doesn't mean that credit counseling enrollment will not affect your ability to get loans and credit. Some lenders see credit counseling enrollment as a good thing -- that you are taking steps to get out of debt and manage your finances. Other lenders will see enrollment in credit counseling as an indication that you have too much debt and have mismanaged your finances. In fact, some lenders, particularly mortgage lenders, will consider your enrollment in credit counseling to be equal to filing Chapter 13 bankruptcy, and although they might approve your loan, it will be at a substantially higher interest rate than those with good credit. If you are planning to apply for a mortgage loan in the near future, credit counseling might not be a good idea for you. Another problem with enrolling in credit counseling is that there are too many corrupt credit counseling agencies operating today that do a poor or lax job in sending in your payments on time, if at all. Too many credit counseling agencies do not send in your payments to the creditor for you before the due date. If this happens, your credit score suffers tremendously as a result of late payment notations on your credit report. |
Credit > Will Credit Counseling Hurt My Credit Score? |
Debt Kit -- Settle unsecured debts for less than half of amount owed Credit Kit -- Improve your credit rating and reduce monthly payments by $200+ |
