Re: Credit Counseling and FICO Score
08-26-2009 03:56 PM
But before I sign up I want to make sure I understand if or how this could impact my score. I've seen articles that indicate it will impact my score (if the creditor reports it as "not paid as agreed") and articles that say it will not impact my score at all (FICO doesn't want consumers penalized for joining a plan).
As long as you are in a CCCS - Debt Managment Plan and not a Debt Settlement Plan, they cannot report you as not paying as agreed since the DMP company negotiates a payment that will have the account PIF in 5 years which obviously is paying much more than the minimum payment you were paying before. You pay the full principle off plus in most cases some interest.
If they are a debt settlement company, they will reduce the principle you owe and it will destory your credit and possibly rip you off in the process.