Let MMI help you with credit and debt management
Because having good credit does have some privileges, one of the most common questions posed to the credit counselors at Money Management International is how participating in a credit debt management plan affects a credit score. It is a common misperception that working with a credit counseling agency is viewed by lenders as being the same as if you file for bankruptcy. This is simply not the case. A notation that you filed Chapter 7 bankruptcy would remain on your credit bureau file for up to ten years and can prevent you from opening a bank account, getting insurance or getting a better job.

On the other hand, if you choose to participate in a credit debt management plan, your ability to get credit in the future depends on several things. First, your ability to get credit in the future would depend on how your credit debt management plan is set-up. For example, if your budget doesn't permit you to pay full payments, for a period of time some of your creditors might report you are not paying as originally agreed although they have accepted the reduced payment. When you are able to make regular payments again at the completion of your credit debt management plan, this notation will be removed.

According to Liz Pulliam Weston of MSN Money, the current FICO formula ignores any reference to credit debt management that may be in your file. That’s been true for the last three years, after researchers at Fair, Isaac, the company that created the FICO scoring system, noticed that people using credit or debt management assistance didn’t default on their debts any more often than anyone else.

For more information about your credit score and how credit debt management from MMI can help, visit www.moneymanagement.org.