2006-06-17 10:30:29 · 12 answers · asked by Augie40 1 in Business & Finance ➔ Personal Finance
Pay them off yourself. Beware of most of those credit-counseling companies that offer to consolidate your bills and lower your interest rates. Most of them, even if they say they are non-profit, will take your first couple mass bill payments for themselves. Even if they help consolidate your bills, it is your responsibility to clean up your credit report. Also, if they help you with credit card bills, you are not allowed to use the cards anymore. You can do the same thing they do by paying your bills on time and calling your lenders or credit card companies yourself and asking for your rates to be lowered.
2006-06-17 10:34:31 · answer #1 · answered by dh1977 7 · 0⤊ 0⤋
It depends on your definition of a debit consolidation company. If you are using a company that claims they can fix your credit, I would be cautious. Know the company you are working with, call the Better Business Bureau and see if they have a good reputation. If you have applied for a debit consolidation loan with a bank, I would feel confident.
A defined payment plan can benefit you in many ways. It helps you create a budget and it helps you live within your means. In the long run, you will be much happier and find that the effort was well worth it. A debit consolidation company like, Consumer Credit will show up on your report and could reflect as a negative on your scores "it depends on the lenders philosophy - they took control of a situation - they let it get out of hand". Close ended credit (fixed payments) regardless of the source is going to show a positive on your report and you will see the benefits in your scores later on down the road if you are never late. Credit scores are made up a of very complex system, however a diverse debt showing payments on time will benefit you.
If you are trying to control the interest rates, you might try calling the credit card companies and ask for a manager or someone other than the person that answers the phone. They make money on your debit, so reducing the interest rate is not their in their best interest. If you let them know that your have been approved for a consolidation loan and they will lose you as a customer, they might have different attitude. Making paymets above the minimum also help your credit in a small way.
If you are using loan to pay off your credit cards make sure that the funding "disbursement" shows the credit card companies as the recipient of the funds. Banks are monitored for this and they have to comply with the legal documents you sign.
Again, budget...work within your means. Consolidating debit with a fixed payment gives you a timeline and a fixed amount to use in your budget. In most cases they payment will be less than all the credit card payments you are sending out every month. Just be cautions and research the company you are dealing with. If anything take my advise to read the fine print on the loan documents for fees and penalties. If you don't understand what it says, have them expain it to you until you do.
2006-06-17 11:24:59 · answer #2 · answered by Bryan W 1 · 0⤊ 0⤋
A debt consolidation company negotiates with the credit companys to lower your minimum payment. You can do the same by calling them. They usually are happy to have a person work with them rather than skipping payments. Call them and ask to have your interest rate lowered, and minimum payment lowered. Of course, not all will, but anything helps.
Going thru a debt consolidation company also means you cannot use any of your cards.
2006-06-17 10:36:18 · answer #3 · answered by Anonymous · 0⤊ 0⤋
It might be better on your credit score if you pay off your cards, but I feel that the consolidation company is there for a reason. It might have a possible negative effect on your score but if you are happy then it will be fine. Credit cards have such high interest rates that you end up paying double the amount when the government dosn't pay you enough for all the time you put into your job. We work to but htings that are just materialistic to us. We feel that these things bring us happiness but we can still achive this with just thinking positvly.
2006-06-17 10:40:57 · answer #4 · answered by Pablo Pescado 2 · 0⤊ 0⤋
Debt Consolidation Companies will go on your credit rating as a negative. Personal responsibility is always best.
2006-06-17 10:33:48 · answer #5 · answered by Kitten 5 · 0⤊ 0⤋
I would say off the bat, pay them yourself. If you get overwhelmed then look for a low-cost debt consolidation to help you out. Plus it would look better on your credit report.
2006-06-17 10:34:48 · answer #6 · answered by dancingqueen312000 3 · 0⤊ 0⤋
better to negotiate you credit cards one by one yourself than do a debt consolidation company. Read Dave Ramsey's Book on Financial Peace University. see daveramsey.com--sure helped me.
2006-06-17 10:36:10 · answer #7 · answered by snddupree 5 · 0⤊ 0⤋
Nobody (or no company) does something for nothing. Debt consolidation companys simply add their fee and amortize it over time. If you have the cash, pay it off yourself.
2006-06-17 10:44:59 · answer #8 · answered by Mike M 1 · 0⤊ 0⤋
pay off yourself. if you are having trouble call the creditor and explain your situation to them they will work with you. debt consolidation companies will ruin your credit and will get you in more debt than you are now.
2006-06-17 10:35:48 · answer #9 · answered by evilprincess 3 · 0⤊ 0⤋
Pay them off yourself. You're going to wind up paying a higher interest rate if you go through a company.
2006-06-17 10:35:47 · answer #10 · answered by Anonymous · 0⤊ 0⤋