Credit Score For Dummies

If you are managing your debt with credit counseling or a debt management plan, will that count against you in the mortgage qualifying process?

Credit counseling vs. debt management programs

Credit counseling alone — that is, getting advice on budgeting and creating a plan for debt repayment — can only have a good effect on your credit. The fact that you are being advised doesn’t show up on your credit history, and reducing your credit card balances and paying on time improves your score.

However, some debt help firms put their clients in debt management plans (DMPs). DMPs work like this: You send the company a check each month, and they distribute the payment to all of your credit card companies.