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What You Need To Know About Credit Counseling

Karen Gibbs

bad credit bannerHi Karen, I’m drowning in debt and need help.  Will credit counseling hurt my credit score?
    Underwater in Carroll County

Dear Underwater, you are not alone.  The Urban Institute, a nonprofit, nonpartisan economic and social policy think tank based in Washington DC, just released a study showing that one in three Americans is behind in paying debts. 

In their study, Delinquent Debt in America, they found that roughly 77 million Americans have a debt in collection – a debt that is more than 180 days in arrears and has been placed with a debt collector.

This debt is exclusive of mortgage debt and consists of credit card debt, late utility payments, back child support, medical bills, parking tickets and even unpaid membership fees.  The average debt outstanding is $5,200/person.  This debt acts as a drag on the economy as consumer spending accounts for 70% of economic activity.  If households are having trouble paying their debts, they’re not spending and are, in effect, holding back the economy.

Having payments more than 180 days late is reported to credit bureaus, appears on your credit report and will adversely affect your credit score, hurting your access to current and future credit.

Credit reports are compiled by three bureau; Equifax, Experian and TransUnion.  Each bureau uses these reports to calculate their own credit score you reflecting how risky they think you are.

These numbers can also vary from what’s called your FICO score.  Your FICO score is used primarily by banks and mortgage lenders to judge your ability to pay your mortgage and ranges from 300-850 but you have to pay nearly $60 to see this number.

Credit counseling is not reported to credit bureaus and has no impact on your credit report or score.  The National Foundation for Credit Counseling offers free or low-cost assistance.  To find an office near you visit

Serving the community for 48 years, Consumer Credit Counseling Services of Maryland and Delaware, Inc. helps families and individuals get on the path to financial wellness by providing confidential counseling, d debt management programs and community education. To learn more about them, go to:

I want to commend you for taking this first step; recognizing your problem and seeking assistance.  Many are held back from seeking help because of the way society treats them and the shame and guilt that weighs on those unable to pay their bills.

Please share with us your progress so we can celebrate your successes as you move towards financial freedom.


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