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Additionally, mortgage loans backed by federal programs such as HUD or FHA have additional government underwriting guidelines in addition to the lender’s own policies. HUD/FHA states their position on credit counseling is neutral and that a factor they will consider is whether the client has been adhering to the payment plan initially established through the credit counseling agency. The FHA recommends credit counseling programs to those who fear being denied a mortgage loan due to credit approval.

Counseling agencies have also been criticized for understating their clients’ future responsibilities during the initial enrollment process. Agencies have been accused of telling clients to stop paying creditors directly and to then keep the first payment made by the client into the DMP to cover fees. This can result in accounts being charged off during the period that the client transitions into the DMP. Many clients come to the DMP with current accounts; they are simply seeking lower interest rates rather than needing help bringing their accounts current. Since a DMP is designed for consumers who are having trouble meeting obligations it is usually the case that any consumer joining a DMP already has past due accounts. For consumers who do not have past due accounts they must be aware that creditors will carry them past due since that creditor is giving the consumer a concession on the amount of interest charged. In this way a client’s credit can be damaged as the accounts unintentionally fall past due.

Given this criticism, the industry is likely to be changed forever in the immediate future as it is scrutinized by both the consumer and government regulators over how they will be paid for the services they perform. In meantime, there will be no shortage of debt-burdened consumers who will now be facing a burgeoning, and more traditional, collection industry.

The IRS also has weighed in on the subject of credit counseling, and has denied nonprofit 501(c)(3) tax-exempt status to around 30 of the nation’s 1000 credit counseling agencies. Those 30 credit counseling agencies account for more than half of the industry’s revenue. Audits of non-profit credit counseling agencies by the IRS are ongoing.

Other organizations have voiced criticisms of the credit counseling industry, often citing the Fair Share funding model as evidence that credit counselors serve the interests of the creditors over the interests of consumers, and that credit counselors are not forthcoming in speaking out about the actions of creditors for fear of losing what little funding remains. Credit counselors respond that their job is not to take sides but to negotiate with all parties equally to help successfully resolve debts. They further argue that the steady decline in Fair Share funding belies the notion that creditors are in control of the credit counseling industry.

Another common criticism of credit counseling is the assertion that participating in a Debt Management Plan will ruin a consumer’s credit. Fair Isaac Corporation, the company that pioneered the use of credit scores, states that participation in a Debt Management Plan has no effect on a consumer’s FICO credit score. However, the participation in such a plan may appear on consumer credit reports, and the client may have more difficulty obtaining a car or home loan and be denied any further unsecured credit, such as a credit card. This is because lenders often use multiple risk factors to determine creditworthiness. The major factor holding consumers back is the amount of debt they have relative to their income (the debt to income ratio) and not enrollment in a credit counseling plan. While credit card banks offering relatively low-credit-line cards may use a credit score alone to approve a new account, a mortgage or car lender typically will scrutinize the entire credit report more extensively and verify employment and income information. Some lenders view a prospective customer’s participation in a Debt Management Plan as indicative of the customer being unfit to manage his or her finances.

As we know that no one wants to get fail of the business that is started by them. All people who start their business want to reach their success. If you want to get success in running your business, you really need to understand and also use corporate credit concepts that can help you in handling any risk and also obstacle while you are starting to run your own business. No matter what kind of business that you have, corporate credit concepts will lead you to know many important strategies and helps from corporate credit concept to run your own business.

It is much better if you use and also develop corporate credit start from now on so that later if you need any help in handling any problem that will be faced in running your business, you can get the best help to handle any kind of problems that will be faced by you. As you know that there will be much expenditure in running business, corporate credit will help you to handle many expenditure problems that should be finished by you. Using corporate credit concepts in running your business is the best thing that can be done by you since early to get your successful business.