How to find debt consolidation programs and how they affect

[Discussion]

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.

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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Posted: Wed Aug 23, 2006 6:48 pm Post subject: How to find debt consolidation programs and how they affect

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?

JENNEE26

Joined: 22 Aug 2006
Posts: 36
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Posted: Thu Aug 24, 2006 8:10 pm Post subject:

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

imkimssister
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Posted: Thu Aug 24, 2006 8:21 pm Post subject:

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.

NotsoLucky
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Posted: Fri Aug 25, 2006 6:04 am Post subject:

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.

JENNEE26

Joined: 22 Aug 2006
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Location: Florida

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Posted: Fri Aug 25, 2006 7:01 am Post subject:

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..

awknox2003

Joined: 17 Aug 2006
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Posted: Fri Aug 25, 2006 7:41 am Post subject:

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 ?

awknox2003

Joined: 17 Aug 2006
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Posted: Fri Aug 25, 2006 2:21 pm Post subject:

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?)

Gretchin
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Posted: Sun Aug 19, 2007 10:12 am Post subject: I need help

Can anyone suggest an inexpensive but effective debt program to use?

Dee Dee
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Debtcc Points: 100

Posted: Sun Aug 19, 2007 10:43 am Post subject:

Dee Dee, if you register someone may send you a PM with a suggestion. You can also check out the ranking chart. _________________ The only people with whom you should try to get even are those who have helped you. -John E. Southard

Morningstar
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Posted: Thu Oct 02, 2008 8:03 pm Post subject: scared

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?