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Can a credit counselor help in my situation?

ace9848
Frequent Contributor

Can a credit counselor help in my situation?

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!)
Message 1 of 15
14 REPLIES 14
braznyc
Frequent Contributor

Re: Can a credit counselor help in my situation?

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.
Message 2 of 15
ace9848
Frequent Contributor

Re: Can a credit counselor help in my situation?

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
Message 3 of 15
ilovepizza
Senior Contributor

Re: Can a credit counselor help in my situation?

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
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Message 4 of 15
marty56
Super Contributor

Re: Can a credit counselor help in my situation?



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.
1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 5 of 15
ace9848
Frequent Contributor

Re: Can a credit counselor help in my situation?

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!
Message 6 of 15
Gotagoal
Regular Contributor

Re: Can a credit counselor help in my situation?

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.

Message 7 of 15
marty56
Super Contributor

Re: Can a credit counselor help in my situation?


@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.

 

1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 8 of 15
RobertEG
Legendary Contributor

Re: Can a credit counselor help in my situation?

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.

 

.

 

Message 9 of 15
MyFicoAddict
Frequent Contributor

Re: Can a credit counselor help in my situation?


@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...

Aim to be fiscally and physically fit...
EQ - 723 FICO as of Aug 2010
TU - 757 FICO as of Sept 2010
EX - 742 FICO as of Oct 2010 (PSECU)
Message 10 of 15
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