Credit counseling hurts your credit

You may find yourself at some point getting behind on your bills and looking for relief. One route people have taken in the past is to use a consumer credit counseling company.

Many states now require people to attend consumer credit counseling prior to filing for bankruptcy. This means that many lenders will view a consumer credit counseling account the same as they would a bankruptcy. Some lenders, however, ignore consumer credit counseling designations on the borrower's credit report. Some will require the borrower to get out of the CCC agreement before doing a loan. It depends on the lender's own guidelines.

If you are already in credit counseling you may still be able to purchase a home, however the lender will typically require that you have been making your payments for at least 6 months, and that all of your payments have been made on time.

It is a paradox that consumer credit counseling can help you develop good credit habits at the expense of your current credit score. Often, these good credit habits can be developed without trashing your credit profile. You should explore all opportunities prior to enrolling in CCC and sacrifice your credit scores.