Re: Anyone know any cards or things to due for someone who consolidat
ed there credit?
09-30-2012 10:21 AM
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.
so my moniker is, well, rather out of date.
WM Discover $800, WF Plat 12k, Chase Freedom Siggy15k, Amex Plat (60k H/B), Citi AA EWMC 25k