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quarius
Posts: 139
Registered: ‎08-18-2012
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Anyone know any cards or things to due for someone who consolidated there credit?

I know someone who just consolidated all there credit and there score droped 200 points from like 700 something to 500 something, and they r pretty upset after they saw the score. What can i tell them to do? I don't really know any advice to give them for this but i do know that they didn't realize it would be this significant. They have never missed a payment and always had good scores.  R they pretty much starter now all over again?

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Revelate
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Registered: ‎12-30-2011
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Re: Anyone know any cards or things to due for someone who consolidated there credit?


quarius wrote:

I know someone who just consolidated all there credit and there score droped 200 points from like 700 something to 500 something, and they r pretty upset after they saw the score. What can i tell them to do? I don't really know any advice to give them for this but i do know that they didn't realize it would be this significant. They have never missed a payment and always had good scores.  R they pretty much starter now all over again?


Honestly that doesn't sound right; what specificaly did he do and what's on the reports now?  Did he go through some Debt Management Program, as that's a pretty big negative in it's own right when reported is my understanding of it.

 

Without the actual report data, it's hard for us to make a call either way, but a drop of 200 points is almost certainly a negative of some sort.

 

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llecs
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Re: Anyone know any cards or things to due for someone who consolidated there credit?

Ditto. Aside from what was consolidated, were any of the accounts closed as a result of the consolidation? Is your friend looking at a FICO score? Were both scores for comparison pulled from the same source (e.g. a lender)?

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Shogun
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Re: Anyone know any cards or things to due for someone who consolidated there credit?

+1 Major negative, or multiple major negatives.  I went through a DMP years ago to keep from filing BK and make sure all creditors got paid.  Suffered worse than if I had filed a BK.  YMMV of course.

 


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quarius
Posts: 139
Registered: ‎08-18-2012
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Re: Anyone know any cards or things to due for someone who consolidated there credit?


Revelate wrote:

quarius wrote:

I know someone who just consolidated all there credit and there score droped 200 points from like 700 something to 500 something, and they r pretty upset after they saw the score. What can i tell them to do? I don't really know any advice to give them for this but i do know that they didn't realize it would be this significant. They have never missed a payment and always had good scores.  R they pretty much starter now all over again?


Honestly that doesn't sound right; what specificaly did he do and what's on the reports now?  Did he go through some Debt Management Program, as that's a pretty big negative in it's own right when reported is my understanding of it.

 

Without the actual report data, it's hard for us to make a call either way, but a drop of 200 points is almost certainly a negative of some sort.

 


Yes they went threw some debt management program, not sure all the full details of this but they got a letter stateing the 200 point drop.

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quarius
Posts: 139
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Re: Anyone know any cards or things to due for someone who consolidated there credit?


llecs wrote:

Ditto. Aside from what was consolidated, were any of the accounts closed as a result of the consolidation? Is your friend looking at a FICO score? Were both scores for comparison pulled from the same source (e.g. a lender)?


Yes i believe all or most of there cards were closed because of this. So it seems from everyones response so far they r screwed in this regard. 

 

Anybody have any suggestions because i believe they screwed themselves.

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llecs
Posts: 32,881
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Re: Anyone know any cards or things to due for someone who consolidated there credit?

Closed CCs w/ a balance still factor into CC util, as do open ones. Unfortunately, many consolidation companies will ask you to close the cards when entering their program and/or when you accept their check. Once the balance goes to $0, then they are forever removed from CC util. So, if closed and at $0, I can see a scenario where a FICO score can drop, especially if they have any other account(s) that still report a high balance and are hurting CC util. It may be out of his/her control anyway, but it's often a requirement they are closed.

 

If the accounts were late which led to the decision to consolidate, then that too can have an adverse result when the accounts show lates and/or derog comments.

 

Not too much they can do other than maybe ask 2-3 creditors if they can reopen the accounts. If not, I'd tell them to open a secured card or two. It also sounds like there are other things going on within the reports. 200 seems too high for changes in util alone. I suspect there are some lates factored in there somewhere, and/or they are comparing two different scoring systems (e.g. a FICO with a FAKO).

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quarius
Posts: 139
Registered: ‎08-18-2012
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Re: Anyone know any cards or things to due for someone who consolidated there credit?


llecs wrote:

Closed CCs w/ a balance still factor into CC util, as do open ones. Unfortunately, many consolidation companies will ask you to close the cards when entering their program and/or when you accept their check. Once the balance goes to $0, then they are forever removed from CC util. So, if closed and at $0, I can see a scenario where a FICO score can drop, especially if they have any other account(s) that still report a high balance and are hurting CC util. It may be out of his/her control anyway, but it's often a requirement they are closed.

 

If the accounts were late which led to the decision to consolidate, then that too can have an adverse result when the accounts show lates and/or derog comments.

 

Not too much they can do other than maybe ask 2-3 creditors if they can reopen the accounts. If not, I'd tell them to open a secured card or two. It also sounds like there are other things going on within the reports. 200 seems too high for changes in util alone. I suspect there are some lates factored in there somewhere, and/or they are comparing two different scoring systems (e.g. a FICO with a FAKO).


Never any lates or negatives in that way. Just consolodation of all there debt, which they had alot of stuff. They r in there 50's-60's. They just wanted a way of being able to pay the debt without going crazy and i don't think they thought it out all the way and now they r not to happy with the resulted and what will happen when they want credit anytime soon.

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cashnocredit
Posts: 1,025
Registered: ‎07-18-2009
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Re: Anyone know any cards or things to due for someone who consolidated there credit?


llecs wrote:

Closed CCs w/ a balance still factor into CC util, as do open ones. Unfortunately, many consolidation companies will ask you to close the cards when entering their program and/or when you accept their check. Once the balance goes to $0, then they are forever removed from CC util. So, if closed and at $0, I can see a scenario where a FICO score can drop, especially if they have any other account(s) that still report a high balance and are hurting CC util. It may be out of his/her control anyway, but it's often a requirement they are closed.

 

If the accounts were late which led to the decision to consolidate, then that too can have an adverse result when the accounts show lates and/or derog comments.

 

Not too much they can do other than maybe ask 2-3 creditors if they can reopen the accounts. If not, I'd tell them to open a secured card or two. It also sounds like there are other things going on within the reports. 200 seems too high for changes in util alone. I suspect there are some lates factored in there somewhere, and/or they are comparing two different scoring systems (e.g. a FICO with a FAKO).


Sounds like it's not a debt "consolidation" but one of these marginal operations that tells you to stop paying your CCs but pay them instead and they will divvy some fraction out to the CC companies. The better ones do this in return for an agreement with the CC company to accept less than what is owed. The more scummy ones just rake off their cut and good luck Charley - hope you don't get sued as well.

 

They both will kill your credit just like a short sale is almost as bad as a foreclosure.

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so my moniker is, well, rather out of date.

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llecs
Posts: 32,881
Registered: ‎08-04-2007
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Re: Anyone know any cards or things to due for someone who consolidated there credit?

I concur with cashnocredit..........was it a debt settlement company? In other words, did they pay less through a settlement?


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