Haha debt man, he is a perfect example of a slimy salesman who is clearly desperate for money because hes on a discussion forum trying to sell. I also offer settlement however, I am going to make key points that will further help you make a decision. Also I will construct rumors of debt settlement versus myths also with counseling or consolidation.
First off debt settlement AND
credit counseling (consolidation) will have an effect on your credit. Debt settlement which i will now refer to as DS has a direct effect on your score becuase the payments that you are now making are not submitted to your lender on a monthly basis. The debt will fall in the charge off stage or collections (it sounds horrible right? well not when you are already 4 months late ) With debt consolidation or DC there is no direct effect on your credit score HOWEVER, on your credit report under public inquires you will have a record showing proof that you are in DC which in some cases will hurt your chances of getting a loan. What a lot of people need to realize is that there is much much more to your credit than just your score. For instance, if you are renting out a condo and you have two buyers ready to take you on your offer, One of them has a 720 FICO (credit score) and is current with his bills but has a womping 75%
debt to income ratio versus a person who has a fico of 650-670 has a few late payments on his credit from when he was younger but now has a clean 25% debt to income ratio, who would you rather go with . I know i would entrust a man who has a better chance of paying me on a monthly basis versus the man who has to chose which lender to pay for the month. That is just one philosophy though which most of you will probably ignore due to arrogance. The fact of the matter is that enrolling for these programs will have an effect on your credit, and usually will increw a fee. HOWEVER the fee in comparrison to making the minimum payment on your debt is absolutely nothing. Here is an example:
You owe $10,000 between 2 cards with rates of 15% and making minimum payments of $430, you have recently lost your job had some sort of reducded income or flat out have just been making the minimum payments and are currently just racking up a higher balance until it peaks the limit. Now at the thought going with DS and falling behind makes you nervous but realistically makes sense. Just measure it (do this for cards you actually have and you can see where your money is going)
Take the time you have been paying on the card (1 year = 12 months etc.)
Multiply by the amount of your payment (if you have been making payments of $350 which is an average payment for 10k)
And come out with your solution
24 x 350=$8400 dollars spent in the last year towards your credit card and you still owe near the full balance if not more.
with DS the equation is
23x350=8050 and best part is Your actually
debt free, not oweing an additional 8 or 9 or 10 k.
Settlement Clearly has it's benefits, everyone is just wrapped around their credit score and it being above par. But if you're having trouble with debt your credit shouldn't be your first concern because it will be the thing to bury you into the ground until it is effected.
And people please stop thinking that making the minimum payment is giving you good credit. I mean come on, your lenders will give you a pat on the back for keeping there lights on and giving jonny his bonus, but no one is going to give you a loan with that type of payment history. Also the main use of credit is to extend it, buy a car or a home. NO ONE wants to give someone in debt a loan. Is that not the most logical thing you've heard all day. If you owed me $10 and came up to me asking for another $20, i'd look at you crazy and charge you interest on the 10. Do your research there is alot more to credit than just your score. As you can tell i run into a lot of arrogance regarding there score and the situation : ). It is made for specific situations if you are a person who can afford double the minimum payment NO KIDDING settlement will kill your credit. Going from superb payments down to not paying obviously is not smart. It is made for people who are on the break of falling behind, have fallen behind, or have to chose between paying the credit cards or providing food for the family. If you dont fallinto that category then its not worth it.
Credit counseling will help you reduce your rates and bring you concurrent if you can afford it. Generally your payments will remain the same or in some cases increase which is usually uncomfortable on people because they have to remain on that payment for several years. It is made for people who have high rates but can back up the payments.
I hope i helped if you do have additional questions feel free to email me at
xxxxxxxxxxxxxxxxxxxxxxxx and i will be more than happy to help you out.
You can't advertise here either, Anthony. - Uncle Wulf
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