Be very cautious when signing up for credit conseling. Many lenders view consumer credit conseling in the same manner they view bankruptcy.
Many times if you are involved with consumer credit counseling a mortgage lender will require that you cancel the consumer credit counseling service before they will do the loan for you. Not all consumer credit counseling services are created equal either. Some, really can help you out considerably, and others do very little for you, so beware of consumer credit counseling services before you enter into an agreement with them.
Consumer credit conseling companies generally recommend a five-year repayment plan. Many lenders will not approve you for a loan until many years have passed after that five-year period.
A reputable loan officer can assist you in repairing your credit, often for a minimal fee (if any.)
Generally speaking if one follows good advice from a qualified individual, one can bring up one's score in 3-6 months. (This, of course, requires DISCIPLINE)
The reason most mortgage lenders view Consumer Credit Counseling in the same manner as a Chapter 13 bankruptcy is this. Many CCC companies approach their client's creditors and offer to settle the accounts for considerably less than the amount that is owed. They use their client/debtors poor financial condition as incentive for the creditor to accept the reduced settlement. In essence, this is the same thing that is done in a Chapter 13 bankruptcy. The main difference is in the case of the BK the creditors are court ordered to take the lower amounts but the idea is the same in that the debtor gets to pay less than they owe on their obligations.
Be aware that CCC will appear on your credit report, and the debts included in the plan will appear as delinquent if the creditors are accepting less than the minimum payment.