I have no derogatories on my CR but my utilization is at 98% and I'm in some trouble with the credit cards. I'm another example of how it's easy to rack up the debt and then get caught into paying around 2.5% of the balance each month and not making a dent in those balances.
Anyway, the DMP says I can be debt free in 4 years. They will essentially lower the interest rates to a 3% average on all the accounts. I'd like to start this now instead of continuing to throw away money on high interest charges.
Here's my problem,
I'm still a student and I get Federal loans for school. Will the DMP have any affect on securing those loans?
My score has been lowered because of the debt ratio but I have no derogatory entries. My score is around 650 right now. I think the requirement to continue to get Federal loans is that your score has to be greater than 600, not in default, and no recent derogatories. I don't remember it saying anything about DMP's and I don't think DMP's really lower your score but I'm not sure.
It will be disastrous for my degree if I don't get those Federal loans so I don't want to jeopardize that. Any advice on the best way to proceed?
Thanks
