Perhaps the most popular question that we hear is “How will this affect my credit?”. The affect that our program has on your credit report is entirely dependent on your current credit rating. For the typical client who comes to us in need of our program, this will only improve their credit rating.
The best way to know the affect of our program is to understand how the credit scoring system works. Approximately 75% of the lenders judge your credit worthiness by your FICO score. And the two main things that factor into your FICO score are your Payment History (35%) and your Debt to Income Ratio (30%). So if you have been late on a payment within the last three months that is something that could bring your credit score down drastically. However, if you are current with your bills and have never missed a payment that does not mean that your credit is perfect. Another important factor to look at is your debt load that you are carrying. If this amount is high, then your Debt to Income Ratio may be high as well, thus bringing down your credit score. And if your total debt and your interest rates are high, then it will be extremely difficult to bring your debt to income ratio down on your own. Since we can lower your rates, you will see your debt load come down quicker therefore improve your overall FICO score. (Length of Credit History, New Credit, Types of credit in use make up the other 35% of FICO score)
DebtWave does not report anything to the credit bureaus. Any reporting to the credit bureaus is done at your creditors’ discretion. Some creditors may place a footnote on your account saying that you are using a third party to assist you in repaying your debt. And when you apply for any financing in the future, some lenders may frown upon the idea that you are in a program, but most lenders will not even care that you are in a program. Because as mentioned earlier, the major thing they will be looking at is your FICO score.
After enrolling into our program, Debtwave can provide two things that could increase your chances of getting financing in the future. First, we can provide you a letter of reference showing that you’ve been paying your bills on time. And second, we can add a positive statement to your credit report once you complete our Financial Education Program.
