Credit Counseling Influence On A Credit Score And A Consumer Credit History From Debt Relief Assistance

Credit counseling for debt relief assistance may be helpful in helping some consumers erase various forms of debt, but there are concerns on how credit counseling will influence a consumer’s credit score or credit history, and for this reason, many individuals have been hesitant to use these services as a way to gain control over their financial life and dig themselves out of debt.

Yet, as more individuals struggle in their finances or have recently found a more stable ground from which they can begin erasing debt and building a better credit score, there are arguments which are being made by financial advisers which state consumers who are in a bad debt situation may want to use credit counseling services as a way to not only get their life back in order, financially, but to avoid further damage to their credit history and score.

Examples of this line of thinking can be found from numerous advisers who feel that addressing one’s debt issue is more important in the beginning than worrying about one’s credit score. Liz Davidson stated on that, “For someone with serious debt, working with a not for profit credit counseling agency to develop a debt reduction plan and get out of debt permanently should take priority over credit scores.” Essentially, there are consumers who are concerned that consulting a credit counseling agency, like a nonprofit credit counseling organization or debt settlement company, could have adverse effects on their credit score, and this is something that many consumers wish to avoid.

However, counselors echo the sentiments of Ms. Davidson as many are quick to point out that any affects that may be seen on one’s credit score will be minimal compared to the effect that missing payments will have. Obviously, consumers who are struggling in their personal financial life may find themselves in a position where paying off various debts has become problematic and, as a result, they begin missing payments to creditors.

There are many sources who are quick to point out that becoming delinquent, facing foreclosure or bankruptcy, or other credit difficulties in one’s personal life will do a more damage to a credit score than debt settlement or credit counseling, and for this reason those who are in a bad financial position may want to consider these options. Yet, when it comes to erasing debts with the assistance of either a credit counseling organization or a debt settlement company, consumers must do the research to make sure that they are dealing with a reputable organization, which is certified, will disclose pricing structures and services beforehand, and ultimately will have their client’s best interest in mind.