Thursday, August 28, 2008

Will using a credit service ruin my credit score?

Reporting on consumer news never gets old. I’ve warned you about contaminated toys, scam artists, crash tests … anything that helps you become a smarter consumer.

I get a lot of my ideas from you, the reader. From credit scores to oil changes, I receive a wide variety of questions. Here are some of the e-mails that have appeared in my inbox lately.

It could, but it could also get you moving in the right direction. If your debt load is already unmanageable – your credit cards are maxed.

credit score is probably already low. So getting help from a reputable credit counselor is the smart way to go.

The fact that you are receiving credit counseling may be noted in your credit report, but according to Craig Watts, public affairs manager for Fair Isaac Corporation, it will not impact your credit score. Watts says your FICO score may be affected (positively or negatively) if the counseling service has you close accounts, pay down outstanding balances, or negotiate partial payments of your debts.

“As a general rule, when a lender settles for only part of the balance due on an account, the way this status is reported to the credit bureaus will lower a person’s score,” Watts explains. The way to restore a poor FICO score, he says, “is to begin a new, consistent pattern of responsible credit management.”

The bottom line: If using the services of a reputable credit counselor gets you back on track, do it.

source : http://www.google.com/news

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