Why is credit counseling so horrible? horrible?

Question

I want to refinance my home and was told that credit counseling could be problem. I thought credit counseling would be a good thing because I'm trying to get bills paid off. The credit counseling company did not tell me that being enrolled in credit counseling would have a negative effect on my credit. How can I correct this? After talking with my mortgage broker he explained to me that credit counseling companies don't tell you that being in credit counseling could be a problem. Credit counseling companies just want your money. HELP...........

Answer 1

Credit counseling itself is not the problem. The way the mortgage company is looking at it is that you got your finances to the state that you needed help. From your standpoint, you get your bills back on track and paid. That's good! It's much better than defaults, late pays, or a bankruptcy would look on your credit. That mortgage broker would have just as much problem with any of those. Potential credit lenders view your record for how you have dealt with credit in the past. So to them, any indication that you got in over your head is bad. Once you get your finances in shape and you no longer need the credit counseling company, the fact that you were in counseling does remain in your record but the longer you maintain a good record after that WILL have a bearing on how credit lenders view you as a potential customer. Good luck!

Answer 2

There is very little regulation of the credit counseling business, and the quality of advice given is highly variable. Anyone considering using such a service should seek and check references. Some counselors are non-profit organizations, and it seems likely that counselors of this type will give better (i.e., less biased) advice. But to seek credit counseling should have no impact on one's credit record -- counselors have no reason (and should not) report on their clients to any credit reporting agency. However, actions taken as a result of such counseling (attempting to re-schedule payments, etc.) will wind up being reported by the affected creditors, and that could have an effect on your score.

Answer 3

You should have asked this question before hand then i would tell you don't do it because it does have a bad effect on your credit ratings. For some reason they think that since your enrolled to it that you somehow don't know how to manage your money. I don't know how to reverse it but i know that you can go to some websites that will help you figure it out. But im not even sure what those web sites were because my husband was looking at them and he's not here right now. Good luck!

Answer 4

If you already went to the counselor then things are already done. You end up hurting your credit worthiness by using them, because it looks like you don't know how to manage money, in the eyes of credit grantors.

Answer 5

maximum places are going to wish a FICO of a minimum of 660 before they even inspect you. because the sub-accurate fallout lenders are alot stricter on the individuals they're going to mortgage money too. attempt a credit restoration provider to assist with rapairing all that damage. good success

Answer 6

Hi, I found an article that might help you.


What is credit-counseling service?
http://www.askaquery.com/Answers/qn492.html

Answer 7

:)