Credit Solution

It shouldn't lower your score.

If your cards are included in consolidation you won't be able to use them until the program is over.

When they say they might cut your debt in half, it almost sounds like debt settlement instead of debt consolidation. Make sure it isn't settlement, there is a difference!

~Mary

Can you tell me what the difference is? Because from what I owe it is $13250 and that the settlement amount will be $5300 and I will owe a service fee of about $2000 so it brings the total to $7300. Then I basically pay $210 for 36 months.

I believe that it is settlement then. Is that bad?

Debt consolidation is where the debt is rolled into one monthly payment, and your counselor fights to drop interest charges and late payments. In debt settlement, your counselor negotiates with the original creditor to cut the amount you owe, as much as half. More than likely, on your credit report, it will report as SETTLED rather than PAID IN FULL, which can hurt your score and your chances of getting credit in the future. I would recommend that you sign up here and talk to one of the counselors. This site offers debt consolidation. Also, consider joining this free forum! You can earn money for each post.

~Mary

VKRIS, I would say you need to speak with a qualified, accredited credit or financial counselor before considering debt settlement. Make sure you speak with someone who is honest and will tell you the pros and cons of all of your options. However, debt settlement is VERY RARELY your best option. It is pretty risky and can potentially be a disaster for your credit. I would guess that about 99 percent of the time, consolidation is a better option. You should really research any option you choose and make sure it is right for you. I hope this helps, if you still have questions feel free to ask away.

Vkris,

Prospective creditors do not like ???settlement' in your credit report. If you go for debt consolidation, your counselor will try to get the account updated as paid or paid as agreed, so that it leaves a good impression.

Before doing business with any company, do some research, review their profile with BBB. Check how long they are in business, what customers are saying about them etc. Keep us posted.

Vkris,
Stanly makes some good points. Also, you say that you don't have bad credit. If you go with the settlement company, every payment you make will be held by them, not paid to your creditors, until they save up enough to settle. The entire time this is happening, your accounts will fall behind and become delinquent and damage your credit. Just one more thing to think about.

Thanks everyone for your help! It has helped me tremendously. The major thing I wanted out of the whole thing was to lump all my accounts together and to be able to make payment. I actually have good credit I believe, the upper 600's, maybe 675-700. Is consolidation also frowned upon by the creditors? It's a difficult decision in the fact that I would like to purchase a major asset within the next couple years. I can afford to pay off these debts but I'd just like a little break.

Then definately consolidation will be your best option.

You should sign up to the community and keep up updated on things! :)

after years of research on the topics of settlement vs. consolidation vs consumer credit conseling vs bk... I have found that consolidation is a term that SETTLEMENT and CONSUMER CREDIT CONSELING companies use to describe their services. Credit Solutions is a Settlement company. By not making payments to your creditors (as you are saving for a settlement) your accounts go deliquent therefore your payment history will take a hit on your credit report, as well as any accounts that go into collections while you are saving funds.. On the other hand if you go with a NON-PROFIT---501(c) Consumer Credit Conseling company you will send them money each month to make your payments for you.. this is also reported to the credit bureaus as a TPA third party assisted.. Lender look at that as a form of Chapter 13 BK... I agree, check the companies out. Do not be afraid to ask them questions, and ask a lot of them! You are paying them for a service and you need to be well educated on the service that they will --- or will NOT be providing you! Hope this helps you!

What consolidation does is they take your debts, they lump them together and they work on your interest rates. So, let me give you an example, let's say your interest rate was 18% - they might lower it down to 15%, and put you in a program that will take 5-7 years to get out.

The part they try to sell you on is the fact that they're non-profit, the truth is not only do they make a profit, they also pay zero in taxes and are paid directly by the credit card companies. So, they get paid by 3 different sources and THEN turn around and ask you to pay a fee on top of it???

Here's the worst part, they show up on your credit report as a third party assisting you out of debt. It freezes you from almost any hope of buying a car, house, or refinancing a home. With us we never show up on your credit report, which allows you to still be able make these major purchases as needed.

When you are done with a settlement program you will owe nothing in 3 years or less!!

I hope this gives you a little more of a true picture of consolidation versus settlement.

With settlement, however you're not paying the entire balance, and lenders look at that negatively.

A non-profit organization does not mean that they can not make money...They do have bills to pay as well, and they have to pay their employees.

Churches are non-profit, but they do take up an offering every week. Does that make them bad? Of course not.

Both types of companies are useful, and neither is necessarily worse than the other one..But settlement should be a last resort, as this is looked poorly upon when all is said and done.

Settlement damages credit. Even though the program is over, it appears in the credit report and creditors look it negatively. When debtors go for settlement, most of the creditors send 1099C or the settled amount is sold to another agency. So the fire is buried under the ash.

Whereas, consolidation updates the accounts as paid or paid as agreed because it pays the full amount to the creditors. Consolidation can lower the interest rate as much as 40% and cuts the late fees and other financial charges. Freezing the accounts temporarily helps consumers to get debt free sooner.