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Does Debt Management Hurt My Credit Score?

The questions about credit scores is the most common one I get on this site. Debt management plan will not hurt your credit score as negatively as a debt settlement plan. Typically, when you enter a debt management plan it will be noted on your score that you are getting assistance in managing your credit card bills but so long as you stick with the program and pay your new consolidated payment on time every month, the mark on your credit report is not something to be too concerned about.

Put another way, in most cases, you are much better off getting assistance through a credit counseling agency (the firms that typically offer debt management programs) than you are in letting your problem get worse. Don’t let the mark on your credit score be a deterrent because if your financial situation gets much worse then you will likely need to seek more drastic solutions like debt settlement or bankruptcy both of which do much more damage to your credit score.

Getting help early is the most important advice I can give to anyone. Don’t let your debt spiral beyond your control. It’s a problem that only gets bigger if left alone.