How bad can credit counceling be? Please Help!

[Anonymous]

I recently joined Cristian credit counceling and they assured me that they do not report to the 3 credit bigs in any way. So i checked with my creditors that they are working with to see if they are going to report to them either and 2 of them said no and 1 said it would show up. I have never been late with any payments to my creditors or had any late fees at all just carrying a bunch of debt with them all. I just wanted to get one payment working instead of 4 or 5 diff. pymts a month and wanted to pay it of quicker so thats why I joined. My credit scores are in the high 700's now so what will happen to them if it is reported? Have I made a mistake?

                                                    Thanks

                                                     t72gator

[Anonymous]

AFAIK, your score will tank until you finish the program.

Why? Most creditors (and I would assume FICO, perhaps??) assume that if you need to enroll in a credit counseling program that you must be in financial jeopardy and having a hard time paying your bills.

That's what I've heard, in any case. However, I've also heard that once you successfully finish a DMP, your credit is better than it ever was. Whether that's due to the program itself or the lessons learned from the program and applied to life, I don't know.

Hopefully, someone else with actual experience can chime in with their experiences!!

Good luck!!

[marty56]

DMP has no affect on your FICO score except when the CCC closes the account.  Trying to get new credit is a bad idea during DMP and I have a 120 day late as the result of it.

Once your complete DMP, your util will be lower so your scores should rise.  I was able to get a good Visa card and an autoloan and a good rate after DMP so their is life after DMP.

DMP was the right choice for me but it may not be for everyone.

Message Edited by marty56 on 06-19-2008 02:46 AM

[fishbjc]

Fico doesn't care.  I'm in a program and my scores have steadily moved upward.  One word of warning:  Check EVERY statement...EVERY MONTH to make sure the payments are being properly credited.

[Anonymous]

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@fishbjc wrote:

Fico doesn't care.  I'm in a program and my scores have steadily moved upward.  One word of warning:  Check EVERY statement...EVERY MONTH to make sure the payments are being properly credited.

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And that's the one major potential downside to DMPs...some of them don't know Jack about credit scoring and don't understand that, just because they have an arrangement with the CCC to pay once every three months and not have the accounts closed, doesn't mean those late payments won't be reported and tank your FICO score.

[JayBeast]

AFAIK, Christian is a credible CCCS. I don't use them simply because I chose a CCCS with a physical presences closer to my home, but from what I read they would be my choice if I didn't have one near me. I am in a DMP and I can assure you that your scores will rise. Mine have gone up about 150 points in the past year and a half.

My advise would be to continue making monthly payments to the CC in addition to Christian until you see Christian's payments post. My DMP posts to my CC on the same day every month, and I had to adjust due dates with them to ensure payments posted every month on time.

You will pay off your cards quicker as your interest rates will most likely be significantly lower on the DMP than they are now and your scores will rise due to lower util and a track record of on time payments. The DMP itself doesn't report to your CR, however, your cards will most likely put a comment that your CR that payments are being managed by a DMP. Your DMP also might stipulate that you close all your cards, however do keep in mind that they'll continue to be on your CR for 10 years after they have a zero balance. Some DMP will allow you to keep one card out of the plan for the sake of emergencies, and in this case it will be unaffected.

Creditors will not know you're on a DMP unless they do a manual review of your CR and see the comments. A previous thread shows that some creditors view this as a sign of irresponsability, while others deem you worthy for taking charge of your actions.

Joining a DMP is defenately not a mistake, especially if you need some help in taking control of your debt. Just be obediant like others have said and make sure your scores don't do a nose dive when starting up and make sure your payments post to your CCs!!! Once you're started and the payments post, you'll wonder why you didn't do it sooner.

[marty56]

Also you need to watch when the CCCs pays the CCC and if it looks like it will be late, you must payd the amount on your own.  Discover was picky about the dates that the CCCS paid them and 1 had to pay them twice during my stay in DMP.

If you have extra money you can pay the CCC yourself.  Also my CCCS did not know what the correct balances were sinhce they dont see the statments so be mindfull of them as well.

[demi]

Make sure before you pay yourself that its ok....when I paid extra I went thru my cccs, some creditors might have a problem according to my cccs.  My scores are in the 680s and 690s and I have not finished yt (3 more months !).  They have risen gradually, and judging by the free credit offers I get, I don't think having DMP on my reports has caused any problem...personally I think it shows your are responsible.

[Anonymous]

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Wonderin wrote:
AFAIK, your score will tank until you finish the program.

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My scores went up during the program and upon graduation - scores dropped about 50 points - even below the scores I started with!

I called D**tF**e Credit Counseling and asked them why, no one could provide an answer and denied any wrong doing. 

PS:

They were also very rude because I wasn't a customer no more.

Message Edited by Solarjuju on 06-19-2008 12:03 PM

[marty56]

Most people in this forum who have completed DMP (myself includeed) are much better off then started.

Given the typical profile of someone who is in DMP i just dont see how they could be worse off then before.

When I started the program, I left my oldest account out of the program.  I did not know jack about FICO stuff but it just so happened that my oldest CC was a gas card and I knew that money would be tight so I figured I would keep the gas card.