07sky04 wrote:Hi,I'm considering taking all of my debts to a credit counseling agency for 2 goals - 1 to lower my payments/interest and 2 to get a game plan on when this stuff will be paid off, an actual "end" date if you will.I'm wondering what effect it will have on my credit score? Obviously, I don't want to do it if it will hurt me too much, but to save $90+ dollars a month in interest (which I would just apply toward the payments anyways) and to know it will all ($22K) be paid off in 5 years instead of the 40+ it would take by paying minimums... it sounds tempting!What's your take on it? Currently, I'm in the high 500 range (550 to 595) and just had all collections removed, 2 30 Day late payments in the past year (all others current) and nothing else derog.
This never made sense to me. You'd think the system would register someone taking definitive steps to pay off their bills and improve their credit as a positive sign. Guess it falls into that part of the matrix where a paid collection does not give you any more brownie points than an unpaid collection. The fact that it counts as such a negative probably says more about the credit counseling agencies' failure to deliver their services.
Tuscani wrote:"Whether or not you are participating in a credit counseling of any kind"I have seen situations where the notation is worse than a BK (not neccessary scoring reasons)!When you are in CCCS, your TL's get marked as "managed by consumer credit counseling". That is probably worse than a BK because it's a sign that you are having financial problems..and the BK option is still available to you. You're a time-bomb for default, most lenders will not go within 100 paces of you.
Things will generally remain that way for the duration of the program, 3-7 years.
Once you are finished, those notations are supposed to be removed. You may find some of your creditors will even re-open your accounts. If the notations are removed and your OC's havent added lates, CO's or other such notations, (AND the CCCS place has paid the proper amounts at the proper times sometimes a big "if") you're good to go. No damage done.
I am currently working with a CCC and only have one account left to pay, a card with an $1800 balance. My wife and I are planning to apply for a mortgage in October/November. Should I cancel the program and deal with the creditor directly?
I entered a CC strictly for the lower rates and mortgage companies did question it. My score went down but only becase the CC agency did not get my first few payments there on time. The first couple months of enrolling PLEASE make your own seperate minimum payment to assure you are not late. This took my down below 700....
I read that with some CCC and lenders they will positively re-age your accounts after 3 payments or after you complete the plan.