You may have heard the phrase that getting involved debt credit counseling services can be as bad as declaring bankruptcy. Unfortunately this is true. This is because if you get involved with an unethical company they could get you even deeper in debt and also cause your credit scores on your credit reports to plunge.

One way that your credit scores can be damaged is by the lenders if they perceive that you are enlisting debt credit counseling services. By law the debt credit counseling services must report that you are enlisting their aid to the credit bureaus. If one of your lenders sees this they can make a negative comment about it on their report because from their point of view (which is a legitimate one) you are trying to escape your moral obligation for paying off the entire debt.

What does moral obligation have to do with anything? When the entire system of credit bureaus adopted the Fair and Isaacs Credit Organization's method of calculating credit scores it was all about whether or not a person's moral character is worthy of credit. This worthiness of course is reflected in your FICO score - the higher your score is the more precious you are to a lender. You also get the best interest rates, lower fees and low insurance rates.

The minute you hire debt credit counseling services your moral credibility is thrown out the window as trying to reconcile your debt for pennies on the dollar is considered to be a sin in the eyes of lenders. This is why enlisting such aid can do almost as much harm to your credit scores as a real bankruptcy. Unlike bankruptcy, these bad credit comments and negative scores can stay on your credit report for years and years making life very difficult.

Tiffany Walker is an author who works for various financial publications online. Read her most recent articles here: Debt Credit Counseling Services.

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