Consolodating?

[marty56]

There are 2 legal programs out there.  The first one is a Debt Managment Program (DMP )where you pay a company a monthly fee to get your interest rates lowered (in most cases) and pay your credit cards down.  This closes the credit card but has no long-term effect on your credit.

The second porgram is the so called Debt Settlement Program, where the company uses quasi-legal methods to get your creditors to settle for less then what is owed.  The problem here is that it will trash your credit and you might even get ripped off.

Message Edited by marty56 on 01-31-2009 11:40 AM

[Anonymous]

Seeing your own score has no affect on your actual rating/score. It's referred to as a "Soft pull". I check my reports/scores on a monthly basis, and I've seen no negative impact.

I was once in your shoes, with 50K in CC debt after a medical illness, salary roughly the same as yours at the time.. I paid off my last card in early 2008. Don't get discouraged, as it can be done. As you start to get your utilization lower, you will start to see lower  interest rate balance transfer offers again. Once I got it down to 25K, I was able to get the remainder of the debt on a card with 2.99% for life.

Good luck!!

[haulingthescoreup]

It used to be that debt management programs (the good guys, the ones that marty described above) would hurt your FICO scores, but this is no longer the case.

For anyone who uses them, just be sure to stay on top of when they're paying. Nothing worse than collecting a string of lates while paying down debt.

[Anonymous]

You will have to start somewhere.  I would use the snowball approach, begining with the card with the least amount to pay off.  After paying it off, use the money you were paying to the PIF card and apply it to the next lowest balance.

Some may disagree and opt to pay the card with the highest interst rate first.  I believe you need to see the fruits of your labor first.  Paying off a couple of cards will get you in the correct mind set.  After a couple of cards have been paid off completely, reassess your strategy.

[marty56]

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@Anonymous wrote:

Some may disagree and opt to pay the card with the highest interst rate first.  I believe you need to see the fruits of your labor first.  Paying off a couple of cards will get you in the correct mind set.  After a couple of cards have been paid off completely, reassess your strategy.

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My DMP used the snowball approach and while it might not have been the most cost effective, each time I saw a CC become PIF, it gave me a great emotional boost and help me to continue on my road to become CC debt free.