Credit Reports

Some people think that seeking out the assistance from a credit counseling agency will affect their FICO (credit) score. It can affect it, but in a good way. One of the ways a FICO score is determined is by the number of on time payments.

Credit counseling is sought after because of the following reasons:

* Anticipated change in financial situation or income
* Prevent financial problems
* To become debt free
* Financial problems have become overwhelming
* Unplanned change in income or expenses

When the above occur, credit counseling can help reach financial goals sooner and get you out of financial trouble in a timely manner. One of the ways this is done is to negotiate a settlement on the debt. This is when the lenders and credit card companies agree to accept a lower amount than the balance of the debt and no longer seek out the remainder of the balance.

Debt settlement benefits the creditor in the following ways:

* Partial payment is received-some money is better than no money, if the borrower files bankruptcy there may be no money for the creditor.
* Receives money sooner-waiting for a collection company to collect or wait for bankruptcy proceedings to be completed, means delays in receiving money.
* Possibility of not receiving any of the money owed-if the creditor feels there is a possibility of not receiving any of the debt owed because the debtor can’t come up with it or may file bankruptcy and other debts will have priority, creditors will accept partial payment.