Debt Consolidation FAQ
Why should I use the services of a credit counseling agency?
It depends on your situation. If you are more than 30-60 days late, you are most likely getting ambushed with late fees and increased interest rates. This is the make-or-break point for many consumer -- if they can't make something happen in negotiation, the increase in minimum payments is often too much to pay. If you are at this point, it is time to seek professional help before it is too late and you end up in collections.
Will a debt management plan affect my credit score?
Enlisting in the plan alone will not negatively affect your credit score. You will often have to sign a contract stating that you will not open any new lines of credit while you are in a debt management plan.
Will debt settlement affect my credit score?
Yes. In order for a creditor to settle a debt, you are usually at least 90-120 days behind on your payments. This has already negatively impacted your credit. If you settle a debt, the creditor will report this to the credit bureaus as settled.
Where can I learn more?
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