How will a debt management program affect my credit?
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• If your credit report already reflects any late or missed payments, then the debt management plan will likely improve your record by facilitating consistent, on-time monthly payments. • Also, if you were late in the past, many creditors will report you as “current” as long as you make all of your monthly payments on time. • If you have never missed a payment, then sending reduced payments to creditors or getting interest concessions through the Debt Management could put a blemish on your credit report. • A creditor may report a reduced payment as “late” or reflect that payments are being administered by a credit counseling agency. • Since the plan objective is to help you get out of debt, lenders may avoid issuing new credit cards until you have completed or withdrawn from the plan.
If you are having trouble paying your bills, most likely you credit report already includes late or missing payments. Participating in a debt management plan could improve your credit rating if you are able to make consistent on-time payments. If you have been late in the past, most creditors will report you as “current” as long as you make your payments on time. If you have kept up on the payments on your debts, sending reduced payments under a debt management plan or getting interest concessions might affect your credit rating. Lenders may decide to not issue you new credit while you are participating in a debt management plan.