Will Going With Clearpoint Credit Counseling Lower My Credit Score? – Mia

“Dear Steve,

I have trying pay off my credit cards for some time and tired of not paying them off. I looked into Clearpoint debt management but I’m worried.

I have good credit 740.

I have a total of 4 cards with most close to maxed out. Clearpoint says they can lower interest on cards by closing them all and have them pay credit card companys one automatic payment that gets withdrawn from my account every month, including their fee. (40/month).

One is Clearpoint a reputable company(not a scam)Two, will this affect my credit? Will they really be able to lower my interest rates?


Drive Carefully

Dear Mia,

It’s not the going with Clearpoint Credit Counseling Solutions that can lower your credit score but the closing of your accounts. That serves to kill the continued good credit you get from having open accounts with a long credit history.

For more on this see Why Enrolling in a Credit Counseling Program Can Hurt Your Credit Score.

If you need a credit counseling program, like Clearpoint then that is actually a different issue and you should be enrolling because you’ve run into trouble, not because you just want lower rates. In fact if Clearpoint was selling you on enrolling just to get lower interest rates, that would piss me off.

If you want to preserve your exceptional credit rating the two most logical ways to reduce your debt would be by using a free service like ReadyForZero.com or an unsecured debt consolidation loan, as long as the interest rate was lower. For debt consolidation loans I recommend LendingClub.com and if you decide to go that route, let me know what your loan number is and I’ll help to fund it, like I do for my other site readers.

If the Clearpoint program takes five years, as an example, your fee for this approach would be $40*60 or $2,400. It’s not free. So you have that cost, and also the potential cost of future credit if your credit score slips.

See also  Can Consumers Count on the NFCC to Find the Right Credit Counseling Agency?

As you can see there is more to this and other costs than just lower interest rates.

The bigger issue though is why your cards are maxed out. If you have great credit because you’ve been making payments on time but you are maxed out because you’ve been using credit to make ends meet, then we have a bigger issues.

If you’ve been using the cards to get by and then the cards are closed, you won’t be able to fall back on them anymore. The reality is that you can be current on your bills but have a negative cash flow each month that is hidden with the card use.

Maybe you can share more with me in the comments about what has been going on and what the ClearPoint sales pitch was about lowering your interest rates.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

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Steve Rhode

6 thoughts on “Will Going With Clearpoint Credit Counseling Lower My Credit Score? – Mia”

  1. Thank you again soo much for getting back to me so quickly!
    I’m ready and I think have been for a long time..i also know though paying minimum amounts will put me in debt forever. How about paying the most i can on the most highest interest card and paying the minimum on the others? In short paying off one card at a time?
    I’m really sure what you mean not paying off cards right now?
    Thank again!

  2. Steve & Thomas
    Thank You!
    At this point Im not using any of the cards, and I have not closed any of them.
    Just to let you some of my history..
    I have my own company (photographer) and in starting that many years ago, I used most of the cards to start my business. My business never got successful which left me in alot of debt.. In saying that It also takes alot of time to get a business to be successful and having another source of income compromise the time for getting business really going. With not having an degree other than Photography left me with not many choices to get another job that would leave time for photography aswell. I have been forced to get another source of income parttime for years, and trying to balance both has been very difficult. I know I need a change and need to pay these cards back as soon as possible.

    Best Regards

    • Having been a photojournalism major in college I can certainly understand the issues you face in the photography side of things.

      From my point of view the deciding factor is not if or when you can pay them back but if paying them back is best for you.

      Far too often I see people stuck in a situation where they think the best move for them is to pay back debt, but at the detriment of other things, like building an emergency fund or preparing for the future.

      It requires a much more holistic approach to best deal with your debt.

      When you are ready to take action, let’s explore those options and weigh them with your current financial situation and goals moving forward.

  3. Hi Mia,

    While the balances are a concern, great job keeping up on those payments to keep that solid score. That should help give you more options as you explore what to do next, such as consolidation or balance transfer.

    As Steve says, you definitely want to identify the source of the reason for the escalation of the card balances to the point that they became nearly maxed-out and take the ping on your credit scores and cost of the debt management plan into consideration when deciding which option to pursue. The ClearPoint counselor should have provided a balance-sheet to show how to break your budget even, or hopefully positive, without using credit going forward as well as a personalized action plan to obtain your financial goals.

    As far as reputation, ClearPoint is accredited by several organizations including system-wide membership with the BBB and a continual A+ rating since our accreditation began in 1995 (some of the merged agencies that represent what ClearPoint is today have been around since the 1970’s). We also sponsor educational videos on their website and are a United Way agency as well. ClearPoint is heavily involved with local credit unions, with many of our counselors actually working from inside credit union branches. Most recently, ClearPoint has partnered with a dozen Mexican Consulates across the country to promote financial education to the communities they serve. ClearPoint is also a HUD-approved housing counseling agency. Our client satisfaction rate is 4.3 out of 5.

    On a more lighthearted note, you can possibly win a cash drawing from ClearPoint to help pay down that debt just by checking out our brand-new “love and money” webisode series and entering: http://www.repaydebt.org/wcc_contest/penny-bags-a-buck-episode-1-giveaway It’s fun and all the main characters are actual ClearPoint employees! It’s a great place to work and we genuinely enjoy helping consumers with their needs. Oh, and I am a former client too, for what that’s worth. 🙂

    Best wishes,

    Thomas Nitzsche, Media Relations

    ClearPoint Credit Counseling Solutions


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