Has anyone used a debt consolidation company? I%26#039;m thinking about it, b/c my debt has become un-manageable, but I am worried about it affecting my credit. I have never made a late payment, so my credit is not in bad shape. I was wondering how long it takes your credit score to repair itself...any advice would be appreciated.
Debt consolidation?
Do not do it. It will mess up your credit. I worked as a consumer loan officer for 6 years and I saw how it messed up peoples credit. First off those credit counseling things are viewed by most (if not all) financial institutions the same as if you filed Chapter 13 Bankruptcy. You also will not be able to get any type of credit until you have completed the program - so no new credit cards, personal loans, cars or house. Plus just filing with one of those companies will immediately drop your credit score by at least 100 pts. On top of that those companies seem to treat their customers very crappy. The way it works is you pay them a sum of money and they are suppose to pay your creditors. I would say 95% of the time that I looked at someones credit report that was under consumer credit counseling they were currently past due on their payments. What happened is that these people would pay the company but the company would not pay the creditors on time - I have no idea why. So when I would pull their credit report it would look as though they were behind on their monthly payment for the past 6 months or how ever long they were with the program. And for that whole time customer was not aware because they thought the company was taking care of everything and making all the payments like they promised. And you cant blame them because I would assume the same thing if I wasnt already in the industry.
So bottom line - The companies will most likely not make the payments on time. If they do make the payments your credit score is still screwed and anyone looking at your credit report would view it as though you filed a Bankruptcy. You lose out either way.
My suggestion (if you are capable of it): Since you said you have good credit, is to try and get a personal loan from a local credit union. Credit unions almost always have lower rates than banks. If you have ever had a loan with a credit union in the past then that would be the best bet since most credit unions are more lenient on past customers. (and not just having a savings acct but actually having some previous type of loan with them, even a credit card is considered a loan). If you dont qualify for a large enough personal loan to pay off your debt you may think of putting up something as collateral. If you own a car out right you can get a loan against it. Or if you currently still own a car (or anything else) and you owe less than what its worth you can refinance it and get cash out on the differnce between what you owe and how much it worth.
As for repairing your credit it definitely is on a individual basis and what your future intentions are but in general a big issue affecting people is a high credit to balance ratio. So if you most of your credit cards are near their max that is an immediate red flag for customer. Also having a high ratio will lower your credit score. Othe stuff negatively affect credit is opening too much credit within a short amount of time or just having too much of one type of credit.
Hope this helps.
Debt consolidation?
The aim behind debt consolidation is to reduce the payments or the interest rate. You make a single payment toward the loan instead many payments each month.
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Debt consolidation?
They can hurt you more than help you. I learned the hard way.
The best think is to write out a budjet. I can help you with that if you want.
Debt consolidation?
I wouldn%26#039;t go for a Company that specialize in %26#039;debt consolidation%26#039; just in case. As far as credit history goes, you can have tons of debt and have an outstanding credit score (you only get bad credit when you start missing payments). I would apply for a loan with a well known company and explain it is for a new car (they are always funny when you say it is to %26#039;put all your eggs in one basket%26#039;. Stay away from Companies that specialize in %26#039;helping%26#039; people with debt, they ALWAYS exploit peoples weakness and charge silly APRs.
Debt consolidation?
Debt consolidation is not a solution, though it may reduce your monthly interest bill and so ease the pain a tad. Your problem is too much debt. If you can, just start paying down the most expensive debt and do it more rapidly than the required minimum monthly payment.
Probably, over time, the only real solution here is to spend less or sell something (Ebay?) to wrestle this problem to the ground. Many people have disciplined themselves to spend no more than what comes in each month, and that is after they%26#039;ve met debt repayments for the month.
If you%26#039;re not already in too deep, act as though you were in too deep now and make paying off those debts your number one priority.
Debt consolidation?
I started with the account with the smallest balance and made double or triple payment, ( of the min. payment due) until it was paid in full. Also used tax returns to pay down faster. Most important; close the account once paid in full. Available credit is available debt, and bad for your credit score. One more thing if you have a high available credit, say $2000. for every $500. you pay off call and have your credit limit lowered. Good luck!
Debt consolidation?
As your debt has become unmanageable so you can try to go for a debt consolidation. Try to go to reputed organisation. It will take few years like 3-5 or even more to bring back your credit score to a good state.
To know more you can visit
www.debtmanagementguru.blogspot.com
Debt consolidation?
First off what does debt consolidation mean?
Debt consolidation-entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.
Getting a debt consolidation is the best idea. You pay off your old debt and start with fresh debt and at a lower rate and its just one payment. Why have 4 different payments for 8%, 10% 18%. Makes no sense at all. Anyone who thinks debt consolidation is wrong doesnt understand it. Go with a debt consolidation and your debt will be very manageable.
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