A: When entering the Debt Management Program, you will be advised to close all of your open lines of unsecured credit, so that you will not incur any new debt while trying to solve your current debt problems. Initially, this may cause a drop in your credit score. However, you can expect your credit score to improve on the debt management program if you follow the rules of the program, do not open any new debt, and commit to making on-time payments. The combination of on-time payment and a reduction in total debt should have a positive impact on your score.
While you are on the program, some creditors may place a notation on your credit report indicating that your account is being managed through credit counseling. This is a
neutral notation that does not affect your credit score, which is what most lenders use to determine creditworthiness. The way this notation is viewed by individual creditors varies. Some creditors may view the "CC" notation as a negative, when making a decision to extend new credit; however, you are strongly advised against opening any new lines of credit while participating in the program, as your ultimate goal is to become debt-free.
The CC notation is usually removed by the creditors when you complete or terminate the program and, if it is not, you may contact the credit bureaus to have the inaccurate information removed. We recommend that you review your credit report approximately 60 days after completion/termination of the program, to ensure that all information is being accurately reported.