Question 1

Is a debt management plan right for you?

Accepted Answer

A debt management program may be right for you in the following circumstances: You're struggling to pay off high-interest credit card debt. You have several credit cards with different payments and due dates each month, which makes your bills hard to manage. You're looking for structured financial support, advice, and guidance without turning to bankruptcy.

Question 2

Do debt management plans affect your credit?

Accepted Answer

A debt management plan may affect your credit because it involves closing credit accounts, which might change your credit mix, length of credit history, and your credit utilization, or how much of your available credit you are using at one time. Each of these factors may impact your credit score. However, a debt management plan may hurt your credit less than some of the alternatives, such as a debt settlement or declaring bankruptcy. Plus, once your debt is under control, you can work on practicing good credit habits to rebuild your score.

What's a Debt Management Plan?

Key Takeaways

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