Debt
Management Misconceptions
There is a
big misconception regarding what is reported to the credit bureaus
while you are on a debt management
program. Debt Consolidation is designed to assist people who
are in a financial bind. Banks may report to the credit bureaus
that your accounts are handled by a debt management agency. This
is not the same as filing bankruptcy which is a common misconception.
One of the
most important factors that the credit reporting agencies consider
when determining your score is timely payments. This shows lenders
that at one time you may have gone through a little financial
distress but now have opted to take care of your financial obligation
rather than possibly giving up an defaulting on your agreement
with your creditors
When your
accounts are behind, by enrolling with our agency you can get
most of your accounts re-aged, in other words brought back to
a current status. Once you establish an agreement to pay back
your obligation and your payments are timely every month, with
time your credit score will show that you are on the right track.
On the FICO website myfico.com under “What do FICO scores
ignore” it clearly states credit counseling does not affect
your score provided you are making timely payments.
Do not get
the wrong idea that just because that is stated it means that
your score is perfect. In order for this program to work, you
must make your payments every 30 days as your creditors require
and it is also your responsibility to read all your statements
to make sure that the information is correct. If a problem is
spotted you must notify your debt-counseling
agency immediately. We likes to establish a relationship with
all of our clients and we must work as a team to accomplish our
main goal which is to give you the freedom of living a debt free
life. If you have any questions please contact one of our customer
service specialists.
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