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How to find debt consolidation programs and how they affect



People are often confused about debt consolidation and want to know how they can find a suitable debt consolidation program. Selecting a good debt consolidation program is important as it should fulfill the purpose of making the borrower debt free without having to pay higher charges.

Finding debt consolidation programs:
A debtor may find a suitable debt consolidation program by opting for one of the following:
  • The debtor may approach the local credit unions as well as the banks with whom he is already dealing. They may offer some good deal to him.
  • Very often, it has been observed that debtors receive consolidation offers from mailers. It is very important to find out how authentic they are; more so because they are offering services online and may be scammers. They may charge more for consolidating a debt than is required and even mislead the debtor.
  • One may also avail debt consolidation services from a company, which has a BBB endorsement.
  • Only those companies who have dealt with such problems before and have a good record need to be contacted.
    • People who have already availed debt consolidation program may also be contacted to get details of the consolidation firms and the programs they offer.

However, when a person goes for debt consolidation program, it gets recorded in his credit report and stays there as long as the debtor is on the program.

How Debt consolidation affects credit:
Whenever a person defaults in his payments, the same gets recorded. Similarly, if a debtor has undertaken a debt consolidation program and has maintained a steady payment, his regular payment details will get updated on the credit report. With the help of a debt consolidation program, all the debt accounts become current.

Finally, when the debts have been cleared, the debtor's credit report shows the same. This in turn has a positive impact on the credit score and consequently the score goes up. All financial activities performed by the debtor can be seen in the credit report - the good and the bad. However, having a bad credit does not mean that a person cannot take a loan again.


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Send message to JENNEE26
Sub: #1 How to find debt consolidation programs and how they affect
Replied on 08-23-2006, 06:48 PM
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Does it show up on your credit report when you do a debt consolidation program? Do you have to be past due on your accounts to start a consolidation program?

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Send message to imkimssister
Sub: #2
Replied on 08-24-2006, 08:10 PM
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Hi Jennee--If I remember right--from when I was on a program before, it does show up on your credit report. I forgot how they word it though. and NO you don't have to be past due on your accounts to start a consolidation program. Hope I have helped and if you have any other questions, don't hesitate to ask! shirley

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Send message to Not so Lucky
Sub: #3
Replied on 08-24-2006, 08:21 PM
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I think it is worded consumer credit counseling and it stays on your report til you pay the card in consolidation off or you drop out of the program.

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Send message to JENNEE26
Sub: #4
Replied on 08-25-2006, 06:04 AM
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Thanks for your advice. I heard that it gives creditors a bad outlook on you. I want to buy a house eventually and I have worked so hard to get my credit to where it is right now.

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Send message to awknox2003
Sub: #5
Replied on 08-25-2006, 07:01 AM
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Wow, this is news to me, I was told it doesn't show up on your credit report. I'm in the same situation, I don't want my credit to be hurt..

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Send message to awknox2003
Sub: #6
Replied on 08-25-2006, 07:41 AM
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So does anyone know does this lower your credit score ? And what happen when other creditors see your in a program like this ? Do credit card companies close your accounts even though you are not repaying them or listed them as part of your plan ?

Sub: #7
Replied on 08-25-2006, 02:21 PM
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Lots of questions here regarding the debt consolidation program. I have some help for you. You use a professional program only when you are unable to pay the debts on your own. There can be some reasons like high interest rates, fees making the total debt unaffordable at that stage. If you can make the payments on your own, this will be the best thing to your credit.

If you want to use the consolidation program for making payments easier at your situation and prevent defaults, it helps in keeping the accounts current. You are not in default any more, and the bills are also getting paid off in time. The credit company will report the accounts along with the program used. Those who will be seeing your file will understand that you paid off the debts through the program rather than defaulting on it. This shows your good responsibility. It's better than paying nothing and get the R9 status. Charged off accounts, bills in collections, judgments tarnish the credit to the worst. Consolidation acts as a medication before the wound gets deeper.

When you have completed the program, the consolidation is taken off from your file. No one will know about using this program. The credit scores go up as and when creditors report to the bureaus. Keep paying off your accounts one by one in the plan and the creditors will update with the bureaus. The scores will also go up as and when the updates are done.

(Hi Shirley, good to see ya Howz u?)

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Sub: #8 I need help
Replied on 08-19-2007, 10:12 AM
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Can anyone suggest an inexpensive but effective debt program to use?

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Send message to Morningstar
Sub: #9
Replied on 08-19-2007, 10:43 AM
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Dee Dee, if you register someone may send you a PM with a suggestion. You can also check out the ranking chart.

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Sub: #10 scared
Replied on 10-02-2008, 08:03 PM
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i just joined a consolidated debt program and after researching i have gotten scared and want to get out is it too late have i already affected my credit score and creditors?




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* Disclosures:
  • By signing up for counseling session, your provided details (Name, Email ID and Phone No.) will be forwarded to the company advertising on the DebtCC. However, you have no obligation to use their services.
  • Some creditors and collection agencies refuse to lower the pay off amount, interest rate, and fees owed by the consumer.
  • Creditors/collection agencies can make collection calls and file lawsuits against the consumers represented by the debt relief companies.
  • Debt relief services may have a negative impact on the consumer's creditworthiness and his overall debt amount may increase due to the accumulation of extra fees.
  • The amount which the consumer saves with the use of debt relief services can be regarded as taxable income.
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