Credit Counseling
When you use a credit-counseling service to structure a debt-management plan, the accounts included in that plan are usually noted on your credit report as TPA (third party assistance). These creditors may also report that the payments are being received through a credit-counseling service.
Credit-counseling services make the point that being in a debt-management plan shows that you’re dedicated to repaying your debts and that can be considered positive when creditors review your report. While that’s true, it will be an uphill battle to qualify for new credit until you get a couple of years of solid repayment history on your credit report.
In general, credit-counseling agencies expect you to not take on new revolving credit while in a debt-management plan. Most plans are scheduled to last from three to five years. While you are in the plan your existing revolving credit accounts will be suspended or closed to new charges.
Realize, however, that these companies are usually set up by the credit card companies in order to collect as much of the debt as possible. Don’t be fooled by their non-profit status… all the profit they make beyond their operating expenses goes back to the credit card company. In some instances, the strategies can be just as bad for your credit score and rating as a bankruptcy!
Below is a quote from the Federal Trade Commission on Credit Counseling.
“Credit Counseling: If you’re not disciplined enough to create a workable budget and stick to it, can’t work out a repayment plan with your creditors, or can’t keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But be aware that, just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, which may be hidden, or urge consumers to make “voluntary” contributions that can cause more debt.”
Regardless of what state you reside in, the National Debt Relief Group can help you find the right solution with a free consultation. You can fill out our Short Application and one of our debt specialists will contact you within minutes, or you can call now – (888) 703-4948.