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13 answers

YES! All your cards are closed taking away all your credit lines.

Your score will drop because there is no longer a credit line to portion your balances to.

Also the creditor can and often do report you are working on a payment plan to the credit bureaus.

I suggest working with the credit card company first. Ask for the collection department with the the credit bank. They all offer assistance programs for short-term situations to help people get back on your feet.

If you have a LONG term situation and tell them that they will not offer you any assistance. This is because the OCC audits banks records and offering a payment program is consider masking delinquency.

2007-05-30 12:53:08 · answer #1 · answered by sWe3RUsu 2 · 0 0

It hurts in the begining...from the day you sign up they have you start paying according to the plan they set up, before they get approval from your creditors for the lower payments. So for the 1st couple of months it hurts because your creditors are not considering your payments to be for the full minimum payment due. It helps after a few months and usually they can get your intrest rates reduced and finance charges taken away. So it becomes easier to get out from under your debt. It is so much better for your credit than bankruptcy.

A great debt counseling agency is Greenpath Debt Solutions (www.greenpath.com). I used them and they are very nice, very experianced, and very good at what they do...whom ever you choose make sure they are legit, their are A LOT of companies out there that are not, and that can hurt your credit a lot.

2007-05-30 12:51:46 · answer #2 · answered by Anonymous · 0 0

It depends on your current credit score. If it is high, say you are not past due, but have too much debt you can not get paid off, then your score will go down.
If you have 30 and 60 day delinquencies, maxed accounts, closed by lender, then your score might stay the same. Certainly if you get further past due, and charge-off then your score would be worse than going with credit counseling.
In general, don't put the cart before the horse. If you are over extended, then get your finances and debt under control first.

2007-05-30 13:07:59 · answer #3 · answered by Gatsby216 7 · 0 0

It depends.

If you are referring to a program where the goal is to reduce your debt--i.e., settlement, then your credit is going to be screwed. You build up money in an account to try to reach an amount you can settle with the creditor...meanwhile, you aren't paying your debts. They'll be charged off, sent to collections, and you may be sued for the debt.

If you are referring to a consolidation program, then your score will take a slight hit during the program. When you successfully complete the program, your score is often restored, if not improved. A consolidation program works by negotiating with a creditor to lower interest rates and maybe waive some fees.

2007-05-31 00:40:01 · answer #4 · answered by Anonymous · 0 0

I was in a debt counseling prgm and was advised that while I was participating, yes it would affect my credit. Since I was trying to pay off $48,000.00 in debt I didn't think anything about it as I wasn't into getting further into debt or looking to purchase any large (car/house) items. It took me 5.5 years to pay off this amount but I have been debt free for 3 years and now have excellent credit.

Depending upon your age, job situation and family obligations I do feel that debt counseling is good. I utilized Money Management, Inc. out of Texas. At the time they didn't charge..........however, I do believe they now ask for money for their service. Over the 5.5 years of working with them, I only had one problem which was taken care of quickly.

Hope this helps.;

2007-05-30 14:52:19 · answer #5 · answered by safitz 1 · 0 0

it will hurt your rating for a litlle while but after you get everything paid off w/your creditors you will be fine again. Trust me I am speaking from experience, just to prove it 1 of the companies that i had a account with was closed when i was in the debt counseling program, now i have that card again. I have just learned my lesson and am not as careless as i once was. don't worry

2007-05-30 12:48:59 · answer #6 · answered by kristy 2 · 0 0

This site has an EXCELLENT article about the benefits of credit counseling. I learned a lot from this site. Its very reputable in a market of scam websites. Don't be fooled by other sites that try to make money off of you, most aren't legit as this one is. Good Luck! http://www.mintcreditrepair.com/debt-counseling-solutions-for-a195.html

2007-06-03 03:14:34 · answer #7 · answered by scoochypup 1 · 0 0

It will certainly help because they can get the debt reduced, have the accrued interest knocked down and allow you to make payments that will help eracse all of the debt in an allotted time IF YOU KEEP UP THE PAYMENTS! And it shows VERY WELL on your credit report!

2007-05-30 12:51:03 · answer #8 · answered by sky4155 2 · 0 0

It is the same as a chapter 13 bankruptcy so yes it hurts lots. That said that can negotiate some great terms to help you pay off the debts.

2007-05-30 13:56:17 · answer #9 · answered by toledogolf 4 · 0 0

Having a good credit rating, helps a consumer get a loan or credit at better rates and for larger amounts.To know "How to
improve credit rating, credit score" plz follow link-

http://www.acreditlibrary.com/improvecredit.html

2007-06-02 01:10:56 · answer #10 · answered by ram k 3 · 0 0

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