How Credit Counseling Affects Your Credit

How Credit Counseling Affects Your Credit

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For many years, participating in a credit counseling program had a significantly negative impact on your credit scores. This has changed, however. Several years ago, FICO, creator of the popular FICO credit scores, changed its scoring system to ignore the fact that consumers are paying their debts through a DMP.

You will have to close your credit cards when you enroll in a DMP, however, and that will affect your credit. If you successfully get out of debt with a counseling agency´s help, however, you will usually find that your credit scores improve, since carrying a significant amount of debt hurts your scores. One counseling agency reports that their clients raised their credit scores by an average of eleven points by paying off their debt through a DMP.