Debt Management Plan

[donkort]

Hi Everybody,

If I enroll in a debt management plan, will my FICO score fall because of the fact that I would have closed 3 major credit cards under that plan?  I believe the reason my FICO's are in the high 600's is because I have 3 open major credit cards with no lates.  Right now, I have a mortgage, 3 major credit cards, and a few minor (i.e., store) cards with no lates whatsoever.  Transuion has a $50 paid collection from around 2009.  Would the fact that I have no lates improve my chances to not have a greatly decreased score? 

Also:  I'm thinking about "checking out new horizons" and would like to know if a FICO of mid-600's (they're in the high-600's now) would affect my obtaining an apartment? 

Thanks for any feedback.

[p-]

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@donkort wrote:

Hi Everybody,

If I enroll in a debt management plan, will my FICO score fall because of the fact that I would have closed 3 major credit cards under that plan?  I believe the reason my FICO's are in the high 600's is because I have 3 open major credit cards with no lates.  Right now, I have a mortgage, 3 major credit cards, and a few minor (i.e., store) cards with no lates whatsoever.  Transuion has a $50 paid collection from around 2009.  Would the fact that I have no lates improve my chances to not have a greatly decreased score? 

Also:  I'm thinking about "checking out new horizons" and would like to know if a FICO of mid-600's (they're in the high-600's now) would affect my obtaining an apartment? 

Thanks for any feedback.

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 Are you sure you need the plan?  Many people here are doing well without one.  What exactly will you gain from having the plan?  If it is the opportunity to settle your debts for less than owed, it could decimate your credit.  

Depending on where you rent, it could affect your rent credit.  Many property managers use a special credit report, but you would risk youir file by settling your debt.

Do you have to pay a fee to the DMP?

Good luck!

[donkort]

Under the DMP, I would settle for the full amount of my debts, but the DMP would negotiate lower interest.

[p-]

Be careful...  It's possible that it could show up on your report as being paid under a DMP terms.  That will adversely affect your score.  Have you tried contacting the card companies yourself and asking for a lower interest rate?  If you have a good history with them sometimes it helps.

After that, make a spreadsheet for all of them, and figure out which is the highest rate.  Pay the minimum on the lowest, and all you can on the highest one.  Once it's paid off, roll that extra payment into the next highest rate card.

Is it a non-profit, free DMP or will you pay a fee?

[donkort]

It's called Balance.  Many credit unions sponsor it.

Thanks for your responses.

[p-]

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@donkort wrote:

It's called Balance.  Many credit unions sponsor it.

Thanks for your responses.

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Good luck!