Has anyone used a credit consolidation company? I am seriously considering using one that has a good reputation, but I was told that I will have to close out ALL of the credit cards that are on the repayment with them!!! For anyone who may know anyway, will closing out all of my credit cards (with maxed out credit limits!) adversely affect my credit rating?? I know it will, but to what extent?? Thank you for any advice.
2006-11-13 12:56:15 · 4 answers · asked by brandon's mommy 1 in Business & Finance ➔ Credit
It will show on your credit file that U are in counseling but it also shows U may have got in over Ur head but have made arrangements to resolve Ur situation. U will not be able to use the credit cards that U include in the service(keeping 1 out for emergencies is a good idea) but they are also being paid on.At least U are making an effort to correct Ur circumstances and not filing bankruptcy.
For everything that is included the company of your choosing will contact all of the Co's, get rates reduced in turn reducing payments and sometimes getting excess charges removed completely.I wish U the best-In the long run Ur credit will be better off this way than defaulting or file for bankruptcy.
2006-11-13 13:56:35 · answer #1 · answered by Mary Who? 3 · 1⤊ 0⤋
I went to Consumer Credit Counseling about 8 years ago, I was about $20,000 in debt on just credit cards. They took my cards and cut them up, then they contacted the creditors, told them what I was doing, and some of them reduced my interest (Discover and AmEx do nothing). Then each month I wrote a check to CCC and they mailed out my payments. I did keep one credit card 'for emergencies' which I never have used. I am now completely debt free and don't have any credit cards. My credit rating is VERY high, according to our last mortgage company rep. Higher than my husbands, whom has never had any money problems. Having a debt and paying it off will raise your score. I applied for and received a credit card while in the program (just to see if I could). I highly recommend these services. Esp the one I used--Consumer Credit Counseling.
Good luck!
2006-11-13 14:17:45 · answer #2 · answered by miss_fred 3 · 1⤊ 0⤋
Basically, with a credit counseling service you're taking out another loan to pay off your loans. Many people like this because they only make one payment per month; however, the interest rate can be problematic.
I would suggest you deal with a counseling service who gives you tools on how to pay off the cards, rather than giving you another loan.
For example, one piece of advice would be to pay off the lowest balance card first. Apply the amount you would put on that to the next highest balance until it's paid off, and so on up the ladder.
I would suggest you close all your accounts but one. It will only be better for your credit rating; they watch how much credit you have available, and don't like a high amount.
2006-11-13 13:08:56 · answer #3 · answered by Anonymous · 0⤊ 2⤋
Your credit rating will plummett. Going through CCC can have the same effect on your credit score as a BK. Debt settlement is a better option.
2006-11-13 13:05:42 · answer #4 · answered by Mike A 1 · 0⤊ 1⤋