topic Re: Can a credit counselor help in my situation? in General Credit Topics

Can a credit counselor help in my situation?

Anonymous — Wed, 02 Apr 2008 17:16:27 GMT

Since all of my bad debt is in one place - a Discover card, can one of those credit counselors really do anything for me? All of my other debts are good debt (mortgage, auto loan, etc...) but I need to get a grip on this $9000 balance, which is hard with 27.99% interest. (That's thousands a year in interest!)

Re: Can a credit counselor help in my situation?

braznyc — Wed, 02 Apr 2008 19:26:58 GMT

I'm not a believer in credit counselors, because these boards helped me get a "handle" on my credit life. Albeit I'm not in the debt you are with anyone, besides my SL, but have you tried calling Discover? Also there is a difference between credit counseling and debt management. I still believe both can be done with a bit of guidance and on your own, but each person has to decide that for themselves.

Have you pulled your credit reports to see your entire picture? Do you know your FICO scores, not FAKO but FICO? The reason I ask, is I'm assuming the interest rate is so high based on something on your reports.

I have read on here that DMP puts a dent on your credit file, while you're in the program, as it's not looked favorably upon, but then again we're in an economic downturn so trying to preserve rather than damage permanently may work for some. It's just a matter of evaluating your situation and deciding what you can do on your own and what you need help with.

Re: Can a credit counselor help in my situation?

Anonymous — Wed, 02 Apr 2008 23:12:45 GMT

TU Fico is 611. That high debt-limit ratio is a problem, as well as missed payments, all from more than 2 years ago, but about 11 of them over 3 different creditors.

thanks

Re: Can a credit counselor help in my situation?

Anonymous — Thu, 03 Apr 2008 00:06:40 GMT

OMG $210 a month in interest.

One answer. Personal Secured Installment Loan tomorrow morning at your bank.

I say secured because the int rate could be about 5.00%-10.75% and more likely to be approved. If that fails there is the same type of loan but listed as consolidation loan at about 14.9%. You could apply for a regular personal loan but the rates are higher around 14%-18%.

Unless you have a BT offer. But the installment loan will dig you out. I like to take a longer term loan and pay it off early so the payments are smaller should I need a lower payment for a month or two.

Shop loan rates online.

Message Edited by ilovepizza on 04-02-2008 05:06 PM

Re: Can a credit counselor help in my situation?

marty56 — Thu, 03 Apr 2008 00:17:25 GMT

braznyc wrote:
I have read on here that DMP puts a dent on your credit file, while you're in the program, as it's not looked favorably upon, but then again we're in an economic downturn so trying to preserve rather than damage permanently may work for some. It's just a matter of evaluating your situation and deciding what you can do on your own and what you need help with.

I am a DMP graduate, class of November 2007. DMP has no FICO score effect other then the hit you take when the account is closed which is usually at the begining.

The only other thing that happens is that there are TL that indicate your account is being managed by a CC company.

I was able to get a Natioal City Visa card after getting finishing the program and the big test will be when I go for a new car loan this summer.

While say BofA may blacklist me forever, nothing is perminate on your credit report.

I havent seen any posts in this forum about people who were in a DMP denied credit weher the stated reason was for being in a DMP other then a specific company blacklisting you for having one of their accounts in DMP or a CO/BK for that manor.

Has anyone here been denied credit fort anyhting that was in their trade line that didnt also affect thie FICO score?

I would have prefered not to have been in a DMP but the 4 plus years in the program forced me to manage my money and my credit and changed my life so in that case it was worth it.

Re: Can a credit counselor help in my situation?

Anonymous — Thu, 03 Apr 2008 22:03:28 GMT

Pizza said "One answer. Personal Secured Installment Loan tomorrow morning at your bank."

Can you tell me more about one of these loans? What do I use for security? (I don't want to put my house up just in case - my car will be paid off in December - can I use that?)

Thanks!

Re: Can a credit counselor help in my situation?

Gotagoal — Sat, 02 Oct 2010 15:26:12 GMT

Hello - Thanks for posting. I'm considering DMP but I've worked so hard to get my score to 688 and now I'm in a pickle which means I may need to do a DMP. Will my score drop considerably? I'm trying to do the right thing by paying these off it time through a good DMP (any recommendations?) without having to file BK. I may loose my job which is what my concern is. I have about $24K in CC debt and with the interest rates, I'm just in over my head paying minimums ea month. I need to figure out a plan.

Any advice? Thank you!

I'm a big MyFico fan. This site/forum has helped me grow/learn and do very well over the last few years, for which I'm very grateful.

Re: Can a credit counselor help in my situation?

marty56 — Mon, 04 Oct 2010 22:20:00 GMT

@Gotagoal wrote:
Hello - Thanks for posting. I'm considering DMP but I've worked so hard to get my score to 688 and now I'm in a pickle which means I may need to do a DMP. Will my score drop considerably? I'm trying to do the right thing by paying these off it time through a good DMP (any recommendations?) without having to file BK.
I sent you a PM on the DMP company I used. Using a DMP will not effect your FICO in the long term. There could be a drop due to closed accounts vs util but you won't be applying for credit during the DMP anyway. Also being in a DMP shows you are making an effort to clear up your debt which will reflect positively for work.

The only down side of DMP is an increased monthly payment.

Re: Can a credit counselor help in my situation?

RobertEG — Tue, 05 Oct 2010 04:13:04 GMT

If you only have only a few creditors to deal with, I, personally, would not pay a DMP to address it.

You have speific accounts to focus on, and you can deal with it yourself, once you have some objective facts and opinions.

If you would just post the current CL, balance, and prior derogs on the derog accounts on this site, you will get advice that is, in my opinion, more objective than that you will receive from a DMP.

It depends on the effort you can put into it yourself.

Re: Can a credit counselor help in my situation?

Anonymous — Tue, 05 Oct 2010 12:55:18 GMT

@RobertEG wrote:
If you only have only a few creditors to deal with, I, personally, would not pay a DMP to address it.
You have speific accounts to focus on, and you can deal with it yourself, once you have some objective facts and opinions.

If you would just post the current CL, balance, and prior derogs on the derog accounts on this site, you will get advice that is, in my opinion, more objective than that you will receive from a DMP.

It depends on the effort you can put into it yourself.

.

I agree with this. Listen, I know others have given you the advice to go with a DMP but in all honesty, they cant do anything you can yourself. Save yourself the fees and put it in your savings and consider it paying urself. If its just the one discover card with the 9K, just get a signature loan - it will be anywhere from 9-15% but way less then what you are paying discover - contact a CU.

Also, the best option would be, if you have the cash available but dont wanna spend away your life savings then just take out 9K, go to a CU and get a savings secured loan.... I know many that offer 2% on top of your savings rate - which is really cheap money to pay off a card with 20%+ interest. Think about it - this is a great way to go...

I also know you mentioned that you have a car loan, which will be paid off soon - just refi the car with cash out if there is equity in it and then just have the car payment rather then that extra discover payment...

Finally, my last advice - once you do PAYOFF the car - treat urself... a little treat - for motivation - and be DISCPLINED - do not end up running the card up again - otherwise you will have the payment again, plus you may loose your savings secured or auto secured collateral...

good luck...

Re: Can a credit counselor help in my situation?

Anonymous — Tue, 05 Oct 2010 13:05:56 GMT

Ooops.... did NOT see that this post was from 2008! - My bad.

Anyway - Gotagoal - same advice as above - if you have the savings - just do the savings secured loan - but I know 24K is a lot. DMP will definately hurt, maybe a signature loan from a CU - this requires you to actually call and speak with the underwriter and they may require you to close some of the cards, but atleast you will have one payment at a lower interest and save the fees for DMP.

P.S - there is no rule that you cant call the CCC's and re open accounts when you have paid off the signature loan...

Good luck.

Re: Can a credit counselor help in my situation?

marty56 — Tue, 05 Oct 2010 21:58:46 GMT

While a DMP company charges a monthly fee, even at say $50 a month, you probably won't be able to just call a CCC and get them to lower their interest rates.

Debt consolidation loans usually fail since most people don't change their spending ways and using a DMP might save money in interest in the long run.

Re: Can a credit counselor help in my situation?

Anonymous — Wed, 06 Oct 2010 14:44:13 GMT

Yes, this is your point of view. You have had success using this method, however, I have had success without a DMP and others that I know. $50 a month? really - wow that is amazingly wishful - again, even if it is 50 a month - this is money that the person can put into his/her own savings account - or better yeat - extra 50 to pay off the debt even quicker - every little bit helps. I understand that a debt consolidation loan can soemtimes lead to the person being stuck if they dont change their own ways, thus, key piece of my advice was that they should close the cards and change the spending habits.

I am sorry but, any blood sucker like a DMP who sucks money for doing what you can do yourself is ridiculous - besides - most times they mess up your credit anyway - it all depends on who you talk to and how you talk to when you call the bank to ask for a repayment plan....

Re: Can a credit counselor help in my situation?

haulingthescoreup — Wed, 06 Oct 2010 15:14:21 GMT

Well, there's a difference between a DMP and a DNP (debt negotiation program.)

A lot of it depends on how one got into trouble in the first place. If it was one of those perfect storms of bad economy, bad health, and bad decisions resulting in a ton of debt, then it might well be possible to do on one's own, depending on whether the banks are wiling to drop their interest rates to where you can actually attack the principal.

But if the debt is the result of some sort of emotional use of credit, it's not realistic to tell someone to pull up their socks and behave themselves. They may well need to hand it over to someone else and stay completely away from the whole issue, like an alcoholic realizing that he/she simply can't drink anything at all, period. With time, they might well be able to do that hard personal work so that they can eventually use credit responsibly. Or they might find that in fact, they just need to stay away from it forever.

This is one of those walk-a-mile-in-someone-else's-moccasins, I think.

And again, from a practical viewpoint, the difference might well be whether the APR's can be gotten to a manageable figure, either by the DMP or by the individual. When you can't do much more than pay the interest month after month after month, you're not ever going to get out of debt.

Re: Can a credit counselor help in my situation?

marty56 — Wed, 06 Oct 2010 23:51:05 GMT

@Anonymous wrote:
I am sorry but, any blood sucker like a DMP who sucks money for doing what you can do yourself is ridiculous - besides - most times they mess up your credit anyway - it all depends on who you talk to and how you talk to when you call the bank to ask for a repayment plan....

I don't think you understand what a DMP company is. They are a non-profit company who's job is to negotiate lower interest rates on your CCs. Nothing more. The average rate they get is 10% and a $50 monthly fee is high the high side. On the credit mess up issue, again you are 100% wrong also.
Anyone here care to bet on BofA or Citibank lowering a 15k balance at 22% to 10% or 0%.