So, you are wondering why when on a debt consolidation program that is does not affect your credit? Well according to Barry Paperno, of Fair Isaac Customer Care - "Using a credit counseling service and having this situation reported on your credit report DOES NOT have a negative impact to your FICO ® scores. However, the actions you take based on the recommendations of a credit counseling service may, in some cases, affect your score. For example, an agreement to settle for less than the full amount due on an account may be regarded negatively, as well as any late payments reported either before or after you begin the plan."

The creditors will also bring your account current in most cases and at times they may even waive penalties and late fees. As long as you keep be making your monthly payments on time, this program will not hurt your credit rating.

As long as you have a good credit rating it will stay that way, if your credit rating is not good, then using this type of program will help you rebuild your credit, so you will no longer be considered a risk. This is debt consolidation basics.

Debt consolidation is a way of resolving your financial situation and will help you on getting back on the right track to the financial freedom you are looking for. The burden of your situation can be solved when on this program, helping them get out of the financial hole they may be in.

Although debt consolidation may sound like a loan it is something entirely different. THIS IS NOT A LOAN. Unlike a loan, your debt is consolidated into ONE LOW monthly payment you DO NOT get a loan to pay off your credit cards.

Often these services are a "win-win" situation for the consumer and creditor. Your creditors wins because they save money by eliminating the cost of collections, and in some cases a total loss if bankruptcy is declared plus they get the money that is owed to them without settling and they also win by keeping you as a customer in good standing. You the consumer wins cause you pay off your debt and get yourself financially set again and on the right track to help you financially.