Debt Consolidation?

Question

I have several credit cards, all of which have substantial balances (totaling about $14,000). I'd like to contact one of those debt management programs to see if I can consolidate my bills and get this crap paid off once and for all, but I don't want to get mixed up in some scam or something that is going to hurt my credit score, which is a relatively good 704 right now). Does anyone have any suggestions or experience with these things? Or a company that you can recommend? I'd greatly appreciate any advice.

There is some really good advice here. Thank you all. Question: Where can I get a 0% card???

Answer 1

You will ruin your credit score if you do debt consolidation.

You will be transforming revolving debt (credit cards) to installment debt (loan). This is not good. Some people say debt consolidation is just as bad as bankruptcy.

Any score above 700 is good; you can just about get what ever you need in terms of credit if your score is over 700.

Just slowly pay off your credit card debt to the credit card companies. Hope this information helps you!

Good Luck!

Answer 2

Some folks are wrong. It used to drop your score, but the latest article on MSN said it won't. They are learning people in this program have a better shot at paying their bills. But it is true, while in the program you cannot get a mortgage.

The standard goes like this. If you can afford your payments, you do not need a program. The programs are for those falling behind and accruing outrageous fees.

With a 704, you can easily get a 0% card. Transferr and use 0% for a year. And again until it is done. Getting a new card once a year will not hurt your credit significantly.

Answer 3

If you can qualify for a loan with a good rate, then that is usually the best way to go to eliminate debt and build your credit.

If you are having trouble making the minimum payments or have late payments, then a debt management program could be considered at that point. You should not plan to buy a home while you are enrolled in a debt management program.

There will likely be text notations on your report that indicate you are enrolled in a debt repayment program. These notations are not factored into your credit score, and they are removed once the account reaches a zero balance.

If you can get a loan with good terms, that should be your first option. If you need rate reductions to reduce your debt faster, then speak with an accredited financial counselor. Just be sure that their organization has a satisfactory rating with the Better Business Bureau.

Answer 4

by doing so, your score will immediately drop. don't know if you are planning on buying a house in the near future or not but lenders look very negatively on debt consolidators and will not even touch you if you're in a program. they will after you have finished paying off all your debts AND once your re-established credit is up and running. if you already own a home then a refinance would be your best best as you can pay off everything (which will increase your score) as well as get a better rate and possibly some cash out for personal use. a good majority of debt consolidators charge you something. may be only twenty or thirty bucks a month but that stuff adds up. find one that DOES NOT charge anything for their services.

Answer 5

Noooooooooo!!!!!!! A debt management service will ruin your credit!!!!!!! When you go to buy a house and you have a debt management service, it tells the mortgage company that you are not able to handle your finances on your own. You will be turned down. This will affect you the rest of your life.

I was in the Mortgage Industry and had to turn people down because of the same situation.

You can refinance if you have a home...if no home...keep plugging away and pay them off.

Close the accounts as you pay off the debt. Best thing for credit is to only have 2 credit cards. Make sure as you pay off, you call and close. The more you have open will lower your score.

Answer 6

I recently got an $18,500 loan through Bank of New York, to pay off my credit card debt. My payments are very reasonable, and I will have it paid off in 5 years. I am in the process of purchasing a home right now, so my credit is under extreme scrutiny, but even with the loan, my credit remains excellent. The best part is, with Bank of New York, I was able to just get the loan by applying on their website, and I don't have to go through credit counselling, which is a big plus for me. My advice is, apply for a loan asap. I know it was a load off of my mind, and I was able to sleep again, for the first time in months, knowing that there was finally an end in sight. Good luck to you.

Answer 7

The credit management outfits won't bother with you until you are at least 60 days in arrears on one or more of your credit accounts.

With your credit score, you are a very good credit risk. If you 'go late' to get in with the credit cousellors, your score will drop dramatically. And quickly.

You'd be better off in contacting each creditor and asking for a lower APR. With your credit score, most of them will be happy to oblige.

Once you've lowered your interest rates, work out a plan to pay off all of your debt, over a fixed length of time. Start with the one with the highest APR. Pay 10% of the current balance, + the accrued interest for the month on that account and pay the minumum on all fo the remaining accounts. When that is paid off (in 10 months) move on to the account with the next highest APR. Pay 10% of that, plus the interest, plus its former minumum payment. When that's retired, in about 7 months or so, move on to the next. In 3 years or less you'll be debt free and will probably have a credit score of 750 or better!

Answer 8

Try contacting your local United Way agency. My husband and I went there and they only charged 15 a month to consolidate debt. You can do it yourself if you are willing to stick to a good budget. They can help you with that too. and there are plenty of books out there. Suze Orman , for instance. If you can, try paying at least twice the minimum payment each month. try negotiating with the credit card companies for a lower interest rate. Start by paying the high interest cards off first and then keep rolling the payments from that on over to the other cards. It's going to take time either way, but you can do it if you stick with it.

Answer 9

I haven't dealt with them but I think they charge you a fee. Your bank may offer you a personal loan at a lower rate and you could pay off all of your cards and consolidate that way.

Answer 10

debt consolidation

if someone wants to get out of debt today it is pretty easy with a debt consolidation plan
however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

a good place to start in my humble opinion is:

http://umgarticles.atspace.com/debt-consolidation.htm