Many people are afraid to contact a credit counselor for fear that it will negatively affect their credit score. Credit counselors are nonprofit agencies that act as a mediator between the individuals and their debtors.

If you contact a credit counselor to help you set up a budget or make a financial plan this doesn’t affect your credit score at all. Most agencies don’t report to the credit agencies when you sign up for a debt-management program, either.

When the FICO score was introduced in 1989 it was administered through the credit agencies and attention was paid to the use of credit counseling. Contacting a credit counselor would drop your score one or two points. That rule was changed in 1998 in response to consumers concerns.

Most of the counseling don’t report to the credit agencies that you have signed up to receive help. The creditor may report if the debt is being repaid through a reduced payment program. This should be a minor concern if you are in debt and in need of counseling to help manage things. I went through a personal bankruptcy in 1989 and I said to the attorney who was handling things that I was concerned about my credit rating. His response was, “Son, it’s already in the toilet. Let’s clear things up so you have some breathing room”. And he was right.

Contacting a credit counselor is the same thing. If your creditor reports in some fashion ‘that the debt was not paid as agreed’ that could temporarily lower your score. However the effect will be minimal in the overall scheme of things because it will help you get out of debt. The most important thing – is that you don’t miss any of these payments.

Even if you are making reduced payments the scoring models will usually look at whether the payments are made timely and how the balance compares to the credit limit.
Our website http://www.1-800BadCredit.com has some great credit counseling agencies. If you need help, don’t put it off. Contact them today and get started. You too need some breathing room and this is one of the best ways to get it.

http://www.1-800BadCredit.com provides up-to-date information for people
with bad credit. Providing auto loans, mortgages and refinance options,
credit cards, credit counseling, personal loans, identity theft
protection and advice & tips on saving, budgeting and getting out of
debt. Founded by Dewey & Leslie Kearney who understand bad credit
because they\'ve been there too!
Site dedicated to helping you find credit solutions