Was thinking of doing one of these programs because my debt is out of hand; I'm not behind on any payments or anything but all I'm doing is paying minimum payments so my bills never go down and I have no money after paying bills. My question is will my credit be hurt if I do this? Also, if I'm listed on a house as owner, does this affect things in any way?
Thanks!!
carolinebr
Posted:
Member since
Re: Credit consolidation question?
I did this. Your credit will go down a little and you can no longer have credit cards. At all. none. Not until your balances are zero.
They close all of your current accounts & then negotiate with the companies. They get you a lower APR but in return, you can't got get another credit card or apply for one or you will be kicked out of the program. No joke. 4 years into the program, I applied for like a VS card or something dumb & the consolidation people called me with a day or 2 and yelled at me.
Also, if you already own a house, you'll be ok but I would not enter one of these programs before applying for a mortgage as it looks bad on your credit, as I found out when I applied for my first mortgage. My dad had to co-sign for me because I had these 5 credit card accounts that were all closed.
HeatherRose
Posted:
Member since
Re: Credit consolidation question?
I've read a few bad things about those companies on LIF i would post the question over there, theres a ton of people who know about this over there.
But I know they usually suggest doing this if your credit isn't good or your behind, since it does effect your credit score. Also to consider, taking out a loan from your bank with a better APR and pay off all the debt with that, or refinance your home for it. I know its reported on your credit as a charge off for years to come when you use those companies which is not good at all.
Good luck
MrsQ-in2007
Posted:
Member since
Re: Credit consolidation question?
I did this when I graduated college bc I had accumulated a lot of cc debt and then started to pay off my school loans.
I had a different experience than Caroline so I think it depends on the company you use. I put my 3 highest debt cc's on a program and kept like 1 or 2 other cc's that had a low balance out of the program bc the cards on the program could no longer be used so I wanted to have a cc or two for emergency purposes.
I don't think it really affected my credit negatively - I was still getting cc offers and by paying more than my minimum balance on the program, I was able to pay off that debt in about a year and a half instead of the 3 years I had signed up for.
Good luck - just do your research since some companies scam people.
GinaZ
Posted:
Member since
Re: Credit consolidation question?
it wont be hurt. but make sure you dont go with a program that gets you the lower interest rate. My friend told me about one where he pays like 1% on his debt. But this was like a program thats one step before bankrupt. Make sure thats not what you do. Your like me. I did mine through Financial credit solutions. I consolodated my bills and make one monthly payment. Its just easier than paying three credit card bills. And it doesn't hurt credit. They explained to me that it shows you are paying it all off and have it all in one place- rather than like 5 places.
GinaZ
Posted:
Member since
Re: Credit consolidation question?
Posted by carolinebr
I did this. Your credit will go down a little and you can no longer have credit cards. At all. none. Not until your balances are zero.
They close all of your current accounts & then negotiate with the companies. They get you a lower APR but in return, you can't got get another credit card or apply for one or you will be kicked out of the program. No joke. 4 years into the program, I applied for like a VS card or something dumb & the consolidation people called me with a day or 2 and yelled at me.
Also, if you already own a house, you'll be ok but I would not enter one of these programs before applying for a mortgage as it looks bad on your credit, as I found out when I applied for my first mortgage. My dad had to co-sign for me because I had these 5 credit card accounts that were all closed.
This is what my friend told me about. i didn't have to close any accounts. I consolodated. This program is for people who can't pay the bills because of the high minimums due. You sound like you can pay yours but want it all in one place. I wouldn't reccommend this for someone in your situation.
dgirl0114
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Re: Credit consolidation question?
Thanks for all the info, ladies; I'm going to do some investigating.
Cpt2007
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Re: Credit consolidation question?
also, check in with your bank or credit union too. they often have debt counselors that can help you explore the options out there before you make a choice.
Toots123
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Member since
Re: Credit consolidation question?
Since it looks like you already own a home, I would suggest looking into a home equity loan before borrowing money any other way. The interest is tax deductible, unlike cc debt or a personal loan debt. Interest rates are also pretty low too so it will be much lower than the % on your cards.
If, for some reason, you cannot get a home equity loan, try a personal loan through your bank first.
If you still decide to do a consolidation, be wary. There are alot of unscrupulous business out there and it is sometimes hard to tell what company is reputable and what isn't. My brother used 'Ameridebt' and it turned out to be a disaster. It made the whole situation worse!
Good luck!
dgirl0114
Posted:
Member since
Re: Credit consolidation question?
I don't actually own the home; my name is on the house so my friend could get a better rate than just him alone. I rent from him. So I can't really do a home loan. I'm looking into a personal loan from a bank to see where that goes.
