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CCCS & FICO Score

Regular Contributor

CCCS & FICO Score

I have a lot of credit card debt,which has dropped my credit score so far.I haven't missed any payments but the interest rates are killing me.I'm thing about enrolling in a credit counseling program.Will this hurt my credit in the future?

Message 1 of 5
4 REPLIES
Community Leader
Senior Contributor

Re: CCCS & FICO Score

I just googled does credit counseling hurt your credit score and found this toward the top:

 

http://www.experian.com/blogs/ask-experian/the-impact-of-credit-counseling-on-credit-scores/

 

Google knows everything.

Message 2 of 5
Established Contributor

Re: CCCS & FICO Score

CCCS programs all require the accounts to be closed (this affects age of accounts) but the program itself doesn't impact credit because the payment they put you on is sent to your creditors on time and you're not falling behind (like debt settlement plan).  This programs work well for people that have small debt amounts <10k as the smaller debt amount can keep payments affordable because the program isn't designed to reduce your payment (usually stay about the same as what creditors are now asking for or could go higher with higher debt amount).  So, if you're already struggling with todays minimums then CCCS wouldn't be for you.  Hope this helped

" EX 683 EQ 691 TU 671 MMS 689"
Message 3 of 5
Community Leader
Senior Contributor

Re: CCCS & FICO Score


gsully00 wrote:

CCCS programs all require the accounts to be closed (this affects age of accounts) but the program itself doesn't impact credit because the payment they put you on is sent to your creditors on time and you're not falling behind (like debt settlement plan).  This programs work well for people that have small debt amounts <10k as the smaller debt amount can keep payments affordable because the program isn't designed to reduce your payment (usually stay about the same as what creditors are now asking for or could go higher with higher debt amount).  So, if you're already struggling with todays minimums then CCCS wouldn't be for you.  Hope this helped


That was a really helpful reply, Gsully. 

 

The only slight caveat I'd make is to your observation about closing accounts.  The only way that closing an account would affect any age-related scoring factor (age of oldest account, age of youngest account, average age of accounts) is if the creditor closed it and then deleted the closed account from the report.  That's very rare -- almost never happens.  


Closing an account by itself does not affect any of the age-based scoring factors, whether immediately, short-term, or medium term.  Eventually (ten years from now) the closed account will fall off the report, and then of course age factors will be affected, but that's way down the line.

 

So for example, suppose I have a credit card that I opened two weeks ago,  Its age is basically zero.  If I close it tomorrow, then nine years from now it will still be on my reports, and it will count toward my age-related factors as a nine-year old account.  No different than if it was still open.

Message 4 of 5
Established Contributor

Re: CCCS & FICO Score


CreditGuyInDixie wrote:

gsully00 wrote:

CCCS programs all require the accounts to be closed (this affects age of accounts) but the program itself doesn't impact credit because the payment they put you on is sent to your creditors on time and you're not falling behind (like debt settlement plan).  This programs work well for people that have small debt amounts <10k as the smaller debt amount can keep payments affordable because the program isn't designed to reduce your payment (usually stay about the same as what creditors are now asking for or could go higher with higher debt amount).  So, if you're already struggling with todays minimums then CCCS wouldn't be for you.  Hope this helped


That was a really helpful reply, Gsully. 

 

The only slight caveat I'd make is to your observation about closing accounts.  The only way that closing an account would affect any age-related scoring factor (age of oldest account, age of youngest account, average age of accounts) is if the creditor closed it and then deleted the closed account from the report.  That's very rare -- almost never happens.  


Closing an account by itself does not affect any of the age-based scoring factors, whether immediately, short-term, or medium term.  Eventually (ten years from now) the closed account will fall off the report, and then of course age factors will be affected, but that's way down the line.

 

So for example, suppose I have a credit card that I opened two weeks ago,  Its age is basically zero.  If I close it tomorrow, then nine years from now it will still be on my reports, and it will count toward my age-related factors as a nine-year old account.  No different than if it was still open.


Very good point, I think I should have used an example like a 10 year old account going through CCCS wouldn't impact credit when it closed but 10 years down the road if no other accounts were opened in that timeframe to offset it.

" EX 683 EQ 691 TU 671 MMS 689"
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