How will Happen to My Credit Score after Debt Counselling?

In Credit Repair of CreditGuru (July 20, 2009 6:39 am)

A over indebted consumer can apply for debt counselling at a qualified debt counsellor. The consumer will apply for debt counselling because he is unable to pay the full monthly installments on his debt to creditors.

The debt counsellor will assist the customer in the application process by negotiating a new affordable payment plan for the customer. The debt counsellor will notify all creditors that the customer is applying for debt counselling first of all. Secondly the debt counselor will notify the National Credit Regulator that the customer is applying for dent counselling. The regulator will then notify all the credit rating agencies.

The credit report will show that customer is currently in debt counselling. Creditors may not borrow money to any person who is in debt counselling. A customer will stay in debt counselling until he has paid off all his debt or ends his debt counselling himself. The customer’s debt counsellor will notify the regulator and the regulator will inform all the credit rating agencies.

The credit rating agencies will remove the note on the customer’s credit file and the file will not show that the customer was in debt counselling. The credit file will only show if a customer is currently in debt counselling and not that he was in debt counselling in the past. After a client completes his debt counselling there will be no trace on record that customer was in debt counselling.

What we don’t know, because debt counselling is still new, is if creditors will make notes of debt counselling. If the bank was a creditor when in debt counselling, the bank will obviously know that this customer was in debt counselling before. Nothing stops the bank of making a note on the customer’s file at the bank. When the client applies for a loan again after debt counselling, they will know that this customer has been in debt counselling.

We don’t know if the bank will penalize the customer, because all debt was settled before the customer came out of debt counselling. So the bank might ignore this fact and only look at the customer’s current financial position.

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    Pingback by How will Happen to My Credit Score after Debt Counselling? | Credit Card Informations — July 20, 2009 @ 6:56 am

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