credit cards

Good question.If you have a good credit score it doesn`t necessarily men you have good credit. Lenders will also look at your debt to income ratio as well so having a good score doesn`t mean you will always get the loan. There are more than one type of debtconsolidation.

type 1 : debt consolidation loan

This will get you one payment with a lower interest rate but you will have to put up some sort of collateral like your home or land to acquire loan. Most financial advisers do not advise turning unsecured debt into secured debt because if some sort of hardship happens later you could lose your home.

type 2 : debt management Plan or dmp

These repayment plans are administered by Consumer credit counseling agencies.With a debt management plan you will repay all of your accepted creditors over a newly negotiated contract and terms. The Counseling Company will negotiate with all creditors to accept a lower interest rate" usually around 6%-10%", waive late fees and over limit fees and spread your payments out over 5 to 7 years. You will repay 100% of your current balance with a payment that typically runs about 3% to 4% of your total debt. If you are not overextended and can afford a payment for this type of program and your bills are 60 days late or less than you should consider doing this type of program. It will get your accounts current again if they were delinquent.This program will not hurt your fico score but will show up on your credit report that you are in this program.Once you complete this type of program it comes off your report as if you were never in the program.

type 3 : debt settlement

The other option is a hardship program for consumers that are having financial difficulties. This type of program called Debt Settlement or debt negotiation. Debt settlement is an aggressive program and best for consumers that don't qualify for debt management, can't continue paying minimum payments, can't borrow to pay off debts and don't want to file bankruptcy. Simply explained, the Settlement Company will work with you to establish a savings program that will be used to pay off your debts over a period of two to three years. You will have one monthly payment and the amount you will pay back is typically between 40% and 50% of the amount owed when you joined the program. This of a great option if you are overextended and your bills are about to start falling behind or already behind. This program does hurt your fico score because the accounts will have to be delinquent to get the creditors to settle for less. However if you are a good candidate for this type of program your accounts are already or about to be delinquent anyways.This will get you out of debt very fast and once completed it will put you in a prime position to reestablish your credit. Most importantly will keep you from having to file bankruptcy.

Both programs are good options depending on your situation. I suggest when shopping around with different company's and programs to please be sure to look them up with the BBB to make sure they have a good track record. This site offers free counseling if you want to explore your options. The # 800-601-1579.
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