A debt management plan is a plan put together by a credit counseling agency that is used to help consumers repay debts and creditors collect money owed them. The consumer agrees to pay a monthly amount to the credit counseling firm and the counseling firm then distributes the money to the credit card companies or other lenders on an agreed schedule. Credit card companies will sometimes lower interest rates for consumers working with a credit counseling agency. While participating in a debt management plan may not directly have a negative impact on your credit score, it may hinder your future borrowing potential.
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