Question about credit counseling?

Question

I heard from websites that going through credit counseling for debt consolidation or lower payments is treated like a Chapter 13 bankruptcy. Apparently this would make it more difficult to get a home loan in the future? Is this true? It would help if I get responses from someone who has gone through credit counseling.

Answer 1

i work for a bank
yes consumer credit counseling is considered one step before bankruptcy and typically you may run into some challenges when trying to get approved for any loan since it will show on your credit you are doing consumer credit counseling.

Not to mention that the counseling services forewarn you that you may have bad marks on your credit while they are managing your debts...

this might work for some people but the thing to realize is that these companies work for creditors, not usually for consumers.

Answer 2

Credit Counseling is bad. It is treated like chapter 13 by all mortgage lenders this is a FACT.

The best way for you to proceed is do what credit counselors do call your creditors try to lower the principle (this actual works) and/or negotiate a payment plan that won't adversly affect your credit.

Micorsoft Word Online Document search has a few documents where you can help clean up your credit but disputing the items on there. All three credit bureaus that report have 30 days to respond if they do not (whether debt is valid or not) they have to remove the line item off your credit report.

Answer 3

First of all "debt consolidation" is either another loan or Ch 13. I have been using "credit counseling" for 4 years now. They negotiated my finance charges down to 7 and 9 % from over 20%. I started with over $10,000 and now only owe $1000. Only 4 more payments!! I get my yearly credit report from all three agencies and the only negative remark is from TransUnion. All show I am in a debt mgmt program. I have never missed a payment which shows 4 years of good payments on all three reports. Remember YOU are putting the money in the bank, they are only dispersing the funds. I have to say I have not been denied credit in the last 2 years and have 2 very large credit limit accounts. If anything my credit is better now. If you use your local owned banks you shouldn't have too many problems getting a mortgage. If you are disciplined "credit counseling" will work.

Answer 4

Credit counseling is what you make of it. You can do everything a credit counselor can do, and for free. FIrst, set a budget, then contact your creditors and try to negotiate a payment plan. Last, DO NOT CHARGE ANY MORE!!

Credit counseling is not treated as bankruptcy. You are not given ANY protection under the law. Depending on which company you use (if you go that route), it can hurt your score. CCCS just sends a letter to your creditors that says, "this is what we are going to send you." All accounts have minimum payments, and the CCCS payments are never enough to cover them. Therefore, your accounts get further and further behind.

You will do better to negotiate directly with your creditors, as it shows your intent to repay.

Good luck!

Answer 5

I went through a bankruptcy 2 years ago. It has been hard just to qualify for an apartment in which I make over the required money to have! I finally had to get a secured credit card with a reporting product called credit builder. Shortly within a month or so I got a very high intrest secured credit card, but it was a start. It's taking so long because I refused to buy a new car which I think would have helped me faster. I still am not able to qualify for the apartment I wanted so I have to wait. I was able to get approved for a house, but Lord, the rate was too high to imagine, so I decided to wait and buy a new car next year. The more good reports you get the faster you will get credit. Now I have 2 cards and one secured card with a product on it called "credit builder that reports to all three credit agencies. It will take you about 1 to 3 years depending how fast you respond and act. I think chaper 13 is a total waste of time. Yet credit repair companys can, help but can be expensive and take too long too, while you can do the work yourself its very easy you just have to get a copy of your reports and one by one knock it out and most times you can call companys that you owe and ask them to give you a one time payout. Get copies and keep receipts but you can start first by rebutting and disputing things on your credit just for the sake that most companys will not respond to the dispute and by law will have to drop it from your credit report within 30 days. I would dispute serveral times then call and ask for one time pay offs at lower rate one by one! Chaper 13 is a rip off and it takes too long! I have a friend from such and agency and told me how to do it and it works its a system and you can beat it. Dont worry so much about old but start buiding new as you erase the old.

Answer 6

I went through credit counseling several years ago. Used Consumer Credit Counseling, it was free and they saved my butt.

It doe's show on your credit that your accounts are being managed by credit counseling and it will effect you if you apply for additional credit while in counseling. After you are through with counseling, you should not have any trouble.

It took me almost 2 years to get completely out of debt but it was worth it.

Answer 7

Check out Suze Oreman's package. It is around fifty bucks, but you get all three credit reports, and you get tips and help on repairing your credit. I did it, and it is very helpful to me, since I too have bad credit.

Basically, it takes time to repair any credit. Check that out first before getting into something more serious like debt counseling. Try not to get any more bad marks on your credit reports. It takes anywhere from seven to 10 years before it disappears, depending on the type of account it is. Student loans, however, do not ever go away.

Answer 8

Self help is the best help you can give yourself.

Do some research on the web on how to deal with collection agencies and how to negotiate with creditors. There are literally dozens of websites that have information on credit repair and how to talk to a collection agency.

You can probably do everything yourself and save yourself that counseling fee.