This is an excellent question and is usually asked because someone like you has been “pitched” on Debt Settlement rather than Credit Counseling (aka “Debt Management”).

In a Debt Settlement program, your monthly payments are re-directed into an escrow account (which you have full control of), rather than going toward your creditors.

However, in a Credit Counseling program your monthly payments are sent to your creditors each and every month.  Credit Counseling uses lower interest rates to deliver its huge benefits in time and interest savings, and again does not require that you stop paying your creditors in order to force them to negotiate.

(Full disclosure: depending on the program, it is possible that your first month’s payments are used to prepare your case, have our attorney draw up your documents, etc.  But don’t worry – if that is the right program for you, we’ll disclose all the details to you up front).

I always like to hear the various “stories” that our clients have been told in the past – talk to me!

Greg

This is a common question, and comes up all the time because in the past, it was true.  However, that changed a while back, and this change was mostly “under the radar.”

After all, if it was publicized, people would be more likely to enter into credit counseling/debt management programs…and the banks wouldn’t keep collecting 20% – 30% interest!  Hmmm…

But rather than taking my word for it, I found a link that I wanted to share with you that comes directly from myfico.com.  (FICO aka Fair, Isaac, & Company is the company that invented the FICO score and is the company that 90% of the largest U.S. banks use to calculate your credit score, so this is straight from the horse’s mouth).

This article clearly shows what sort of information is NOT included included in your credit score.  Click here to read this important credit info.

Items that make up your credit score

Take a look at the last bullet which states:

“Whether or not you are participating in a credit counseling program of any kind.”

Oh, and here’s another article from MSN that talks about the myths of credit scoring.

By paying your bills through our non-profit debt management company, you will repay your credit card debt 100%, more than likely at a much lower average interest rate, with hardly any impact to your credit.  Get in touch with us today and we’ll tell you everything you wanted to know about credit scoring and how the various debt relief options out there impact your score.

Talk back…what are some of the other credit score myths you’ve heard?

All the best,

Greg