I wanted to know if anyone has been in a dept management program, if it has harm their credit and score?

Question

I wanted to know if anyone has been in a dept management program, if it has harm their credit and score?

Answer 1

No....CCCS does not harm your score....However, it will make it nearly impossible to obtain new credit/loans while you're in the program.....but then again, that's the whole point of using CCCS....

Answer 2

Yes, I have been in a Debt Management Plan - and no it has not hurt my credit score.

That was because I went through a CCCS - a non-profit organization who make sure that your payments make it to the company. There are not there to make a profit off you - they get paid by the credit card companies. They are there to negotiate interest rates, and set up a feasible payment plan for you to be debt free.

There are other for-profit companies that don't work this way. They have names like DebtMerica and they advertise pretty heavily online and in newspapers. They promise to solve your debt problems for pennies on the dollar.

What they do is they take your monthly payments, and they put it into an "escrow" account. All your accounts go not just late, but even to collections. These companies are supposed to talk to your creditors, and stop them from threatening you - however, they are not federally mandated to do anything. Their profits are not federally mandated either - so they can take practically as much profit as they like out of your "escrow" account.

So, your accounts go late - and at some point, when your payments have accumulated enough to settle your credit accounts, these for-profit companies then take your "escrow" account and pay off the credit card companies for the agreed upon settlement amount.

And yes, in this instance, you credit will be badly harmed.

I recommend a non-profit like CCCS.