Transcription: Agencies like Cambridge speak to thousands of people every month, and one of the most common questions we hear is, “Will credit counseling hurt my credit score?” The short answer is no, but that comes with an explanation. “Credit counseling” is the process by which a certified credit counselor will help you create a workable financial plan that reflects your income, expenses, and goals. Your counselor will review your finances with you, give you personalized advice to help you develop a budget, provide valuable resources you can use in that process, and recommend alternative strategies to manage your situation. This type of free consultation has no impact whatsoever on your credit standing. Now, one of the options a counselor may offer is enrollment in a debt management program, or DMP. A debt management program will impact your credit, but probably not in the way you may be thinking.

Your credit scores, or “FICO scores,” are calculated from the data in your credit report at any given moment. That’s why they often change from month to month, as your creditors report your activity. The data is grouped into five categories: Payment History, which represents 35% of your score; Amounts Owed, which is 30% of your score; Length of Credit History – 15%, New Credit, 10%; and Types of Credit Used, which also accounts for 10% of your FICO score. The importance of any one factor depends on the total amount of information in your credit report at that moment. This means that what impacts your score may not impact another person’s score as heavily. Now, on to the good news.

Fair Isaac and Company, developers of the FICO scoring model, considers debt management enrollment as a neutral mark – neither good nor bad, and it carries no weight when calculating your score. This wasn’t always true. In 1989 debt management was considered a negative notation; however, the formula changed in 1998 because people were enrolling in DMPs as a proactive step. Instead of looking for help after they fell behind on their bills, people were reaching out to credit counseling agencies before things got out of hand. So if the creditors you include on your program note that your account is being repaid through a reduced payment and interest program, you won’t lose any points as a result of that notation. However, each of your prospective lenders has its own policies. One may view debt management as a non-issue, while others may interpret it negatively. There’s simply no way to predict that reaction.

Although participation in a debt management program isn’t a factor in FICO’s formula, the process of enrollment will affect your score. In a DMP, your credit counseling agency pays your bills once each month, and many creditors drastically reduce their interest rates and waive their late and overlimit fees. In return for those benefits, they require that the accounts you include in your plan be closed. That’s reasonable. Now, closing those accounts lowers your score because the amount of available credit is reduced, and that’s a part of the Amounts Owed category. The number of points you lose depends on the other information in your credit profile at that time. If you have a good credit history, with a lot of accounts in good standing, you may lose just a few points. If you only have a few accounts, the impact may be greater.

At the time you enroll, the agency will let your creditors know when your payment will be disbursed; however, as you transition into the program, you could experience a late or missed payment. That would impact your score, but the length of the program, generally 3 to 5 years, gives you more than enough time to make up for that initial event. It’s also important to remember that even though participation in a DMP is a neutral mark, it doesn’t “protect” you from incurring a negative notation, either. Just like when you’re managing your bills on your own, if you miss a payment on one of your accounts, your history will be affected. That’s one of the things you’ll learn while you’re working with an agency. You’re not just a number to us – we want to show you how to earn lower interest rates by developing good credit habits. Making payments on time is one of them.

If you pull your own credit report or review your score through a free website like CreditKarma.com, which I highly recommend, you may discover that you have too much debt. For example, if all of the credit limits on your accounts added up to $10,000, and all of the balances on those accounts added up to $5,000, you’d be using 50% of your available credit. On creditkarma.com, you’d see a note like “proportion of balances to credit limits is too high on revolving bank accounts,” which means that your score has already been impacted negatively.

(Insufficient room. Please email yourmoney2@cambridgecredit.org for complete transcription.)

More info at http://www.debtcounsellinghelp.co.za or
call us at: 076 514 3756 (in South Africa)

We will notify the National Credit Regulator and all your creditors that you have applied for Debt Counselling as soon as we receive your completed form 17 application form via fax or email.

The NCR will then notify all credit bureaus that you are in debt counselling. When someone does a credit check on your profile, they will see that you are in debt counselling. Under ‘notes’ on your credit file is will state ‘under debt review’.

Creditors may not give you credit when they see this note on your credit file.
When you completed your debt counselling, the note will be removed from your credit file. We will notify the NCR and credit agencies that you are debt free and they will remove the note from your file.

You are now free to apply for credit again.

How our Debt Counselling Program can improve your credit score

I Believe Anyone Can Dramatically Raise Their Credit Score Using These Proven Credit Strategies

You could raise your credit score by 25 points or more overnight with just one of these credit tips.

In this book, you will discover:

Easy To Understand Action Steps Show You The Keys To A Better Credit Score

This life-changing guide to a higher credit score is written in plain English without any jargon, big words or confusing language. Just easy to implement action steps that will help you dramatically increase your credit score (without spending a dime).

How To Instantly Improve Your Credit Score By 20 To 30 Points

Just one tip in this book could help you instantly increase your credit rating by twenty to thirty points. When combined, the strategies in this book could help you go from bad credit to excellent credit.

Credit Repair Made Easy

No matter how bad your credit is right now, you can repair it once and for all! The credit repair strategies in this book will allow you to remove all illegitimate and bad marks from your credit report.

How To Get a Free Credit Score Without Any Hassle

Many websites and companies claim they will give you a free credit score but they don’t! They will try to charge you either a large one-time fee or an ongoing membership fee for access to your credit information. But there is one website that gives you your credit score 100% free without trying to sell you anything, and you can monitor your score 24/7 without any cost! They can even provide you with free email alerts when anything new pops up on your credit report so you can take care of it right away.

How To Get A Huge Discount On Your Mortgage Rates

Following the easy action steps in this guide, you could save thousands of dollars a year in interest on your mortgage, auto loans and other loans.

How To Save As Much As $500 On Your Cell Phone Plan

With the good credit you’ll have using this book, you could save as much as $500 on your next cell phone service plan thanks to your excellent credit history.

Get Better Rates On Car Insurance And Auto Loans

You can also get much cheaper rates on car insurance and auto loans with your new, higher credit score, and avoid getting taken advantage of by shady finance companies.

Have The Ideal Number of Credit Cards To Maximize Your Credit Score

Did you know there’s a “secret number” of credit cards you should have to maximize your credit score? Not only will you learn how getting the right number of credit cards will help your score, but you’ll also learn how to get huge discounts on credit card interest rates and annual fees with a simple 5-minute phone call.

Credit Repair

The Ultimate Credit Repair Guide: Credit Repair Strategies To Increase Your Credit Score Forever!

They say money is what makes the world go round and those who have the money make the rules. For many people this may be true and with the availability of credit now so accessible to everyone it seems that the game has changed sometimes for the better but for others the worst. When we are in debt we live in a world of fear. We sit in our homes waiting for people to come knocking on our door demanding money. They call us at all hours of the night demanding that we pay them and even threaten us with fines and jail time. The truth is that when you have bad credit is does effect your life but it doesn’t have to ruin your life. When looking at the world around us we can see that debt is everywhere. Look at the United States itself. Trillions of dollars in debt and growing every year. With debt being such a problem people are constantly on the lookout for a quick solution to fixing their credit. The truth is that there is only one solution to fixing your debt. It may seem simple but it is the only way. Contained within this book is the answer to that question along with some tips and tricks that will help you get started right away. So if you are deep in debt $10.00 or $10,000 or more download this book. You will be shocked at this simple solution that no one does but everyone is able to do.

A clear presentation of simple and innovative ways to graduate college debt-free with a Bachelors, Masters, and even a PhD degree.

Praise for Author’s Last Book:
“Confessions of a Credit Junkie is presented in a conversational tone, without confusion, techno-speak complexity or excessive industry jargon. The book breaks through delusion and naiveté and can, given a chance, inspire even the most wide-eyed spender to avoid the pit of debt that snared Harzog and so very many others.
–Creditcardinsider.com

If you’re in credit-card debt and you’re tired of being told that all you need to do is give up your daily latte–and cut up all your credit cards–this is the book for you.

Former credit junkie Beverly Harzog racked up thousands of dollars in credit-card debt during a decade of overspending. When she decided she wanted to break free from debt, she found that conventional advice about personal finance didn’t work for her.

So, Beverly created her own unique debt escape plan and succeeded in paying off more than $20,000 in credit card debt in two years.

In The Debt Escape Plan, you’ll find easy-to-follow advice, often laced with a touch of Southern humor, to help you conquer–and stay out of–credit-card debt.

In this much-needed book, you’ll learn:
Why a one-size-fits-all approach to credit card debt doesn’t work.
How to use the Money Personality Quiz to customize your own debt escape plan.
The nine biggest debt mistakes and how to overcome them.
Seven secrets for giving your credit score a quick boost.
how to overcome the hardships of medical bills.
How to debt-proof your future so this never happens to you again!

THIS IS THE BOOK THAT THE CREDIT-CARD COMPANIES DON’T WANT YOU TO READ!!!

So, you may be looking for a book on such a subject because you amassed a certain amount of debt, perhaps fallen behind in some payments, or even considered bankruptcy. Sometimes debt isn’t even a result of overspending but just bad life circumstances such as a death or divorce of someone that helped us live to a certain standard. There is nothing to be ashamed of or even worried about.

Using the strategies in this book, you can pay off your debts in the least amount of time and live free again.

Imagine instead of paying everything off in five to seven years, you’re able to do this in two. Can you wait that long to be completely debt free?

The strategies used in this book are based on time-tested equations that will significantly reduce the time it will take to pay off your credit debt, saving you thousands of dollars. Additionally, Gerry Marrs will teach you some guerrilla tactics that will literally cut your credit card balances in half, and free you from the chains of debt bondage. The plan in this book is simple to implement, and flexible according to your lifestyle needs.

This book will show you some quick-payoff principles as well as how to save more, spend less, and perhaps even make some money. Gerry Marrs calls this principle the three pillars of financial success; save, budget, and earn. When you can balance all three of these functions of personal finance, you can achieve great wealth and prosperity.

Here are some of the things you will find in this book:

* Understanding Debt and Credit
* Types of Debt
* Debt-to-Income Ratio: What is it?
* Median Ranges of Debt-to-Income
* The REAL Cost of Credit Debt
* How banks calculate home loans
* The real cost of credit card debts and how they are calculated
* Getting a better deal
* Practical Money Skills For Life
* Setting Serious Goals
* Why should I set goals?
* Visualize your goals and write them down
* Personal Goals Vs Financial Goals
* Create a Solid Timeline
* 3 Tiered Plan Of Saving
* Short Term and Long Term Financial Goals
* Prepare to do Battle!
* Finding Additional Resources
* Making a Budget You Can Live With
* Health Insurance
* Grocery Bills
* Utility Costs
* Banking and/or Check Cashing Fees
* Additional Income Opportunities
* Yard Sales
* Odd Jobs around Your Community
* Freelance Writing Gigs
* The Light at the End of the Tunnel
* Laying Out Your Debts
* Prioritize Your Debts
* Map Out Other Bills
* Decrease Your Expenses
* Credit Scores and Credit Reports: A Primer
* What Is a Credit Score?
* The Credit Score Model
* Credit Worthiness
* Credit Reporting Companies
* Credit reporting Scams
* Demystification of the credit reporting systems in the United States of America
* The Effect on Interest
* The Get out of Debt Early (GOODE) System
* Choosing which Debts to Pay Early
* Calculating pay-offs
* Online debt repayment calculators
* Right to the Source
* Yet even more calculators
* Manually Calculating Payments for More Control
* Calculating Monthly Credit Card Interest, the Easy Way
* Calculating Monthly Credit Card Payments, the Easy Way (or MAYBE NOT)
* Determining the Amount of Time to Pay Something Off
* Setting up your payment strategy
* What happens when you can no longer make a payment?
* What happens when you miss one single payment?
* What happens when you are unable to pay a second month?
* What happens when you cannot make payments beyond six months?
* What happens when you cannot make payments for years?
* Working with Creditors, Some Useful Scripts
* Proactive Approach
* Reactive Approach
* Sample Scripts
* How To Legally Rob Credit Card Companies
* Debt held by credit card company
* Debt held by collection agency

Don’t delay! Order your copy today!