Mothering Forum banner

1 - 19 of 19 Posts

·
Registered
Joined
·
8,198 Posts
I was just today reading somewhere that it does. I don't remember where, though. I'd investigate it further to make sure. In the meantime, I'll try to remember where I read it and get a link or a reference for you. Hopefully someone else will have a good resource.
 

·
Registered
Joined
·
3,651 Posts
My DH used CCCS to get lower interest rates, lower monthly payments and take off the extra fees. It didn't affect his credit score. Probably depends on what kind of debt consolidation you do. CCCS is just a debt management plan.<br><br>
We boosted his score up by paying down all those bills (paid them off with the tax refund this year!) and adding his name to my CC's with good payment records. His score is higher than mine now!
 

·
Premium Member
Joined
·
1,550 Posts
It won't be possible to open new accounts while you are working with a CCC. But then again, that is the whole point. In the long run it will hurt far less than bankruptcy and often get you out of debt quickly if you can not tread water or pull ahead with the snowball method. If your companies won't settle with you or deal with you at all and the interest rates are crazy high, it may be time to call a non-profit CCC. Once you are paid off through CCC you will see a big jump in your credit score. While some people claim otherwise, it is not as damaging as bankruptcy in the long term and it is possible to get a conventional mortgage after you are done with CCC.<br><br>
Be forewarned that not all CCC are the same. Make sure you go to a legit, preferably local, non-profit. All CCC should offer budget planning and financial education and not make promises about settling or fixing or repairing credit. Also, while some do charge a contribution of $10-15 a month, no legit CCC will ask for an application fee or charge you hundreds or thousands of dollars upfront. Be careful, don't get scammed. Sadly, many people are scammed each year by shady fly by night places that give the real places a bad name.
 

·
Registered
Joined
·
1,419 Posts
<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>kijip</strong> <a href="/community/forum/post/7965219"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">It won't be possible to open new accounts while you are working with a CCC.</div>
</td>
</tr></table></div>
That is *completely* untrue.<br><br>
Unfortunately. <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/lol.gif" style="border:0px solid;" title="lol"><br><br>
We were swamped with credit card offers after about a year of paying through a CCC service. I figure they started rolling in right about the time our utilization ratios dropped to a reasonable level.<br><br>
We managed to charge another very large sum of money on NEW credit cards while DH was finishing school, all while still paying the original amount to CCC. We added the new ones to the old ones for one much larger monthly payment and FINALLY paid it all off a couple of years ago.<br><br><div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">In the long run it will hurt far less than bankruptcy and often get you out of debt quickly if you can not tread water or pull ahead with the snowball method. If your companies won't settle with you or deal with you at all and the interest rates are crazy high, it may be time to call a non-profit CCC. Once you are paid off through CCC you will see a big jump in your credit score. While some people claim otherwise, it is not as damaging as bankruptcy in the long term and it is possible to get a conventional mortgage after you are done with CCC.</td>
</tr></table></div>
We got a conventional fixed rate mortgage at the lowest rate available with CCC still showing on some accounts, though they were actually paid off at the time. Our mortgage brokers actually told us we'd have been better off filing for bankruptcy, though I'm not sure I agree with that, and am glad we paid what we owed so I don't feel guilty about it.<br><br>
Our credit score slowly improved the lower our balances got, the older the late payments got, etc. It wasn't one big jump when we paid the last cards off. One single 30 day late can TANK your score by 50 points, and it takes time to recover from that. The notation of being on a CCC program does not figure into your credit score at all, but would obviously be seen by anyone doing a manual review of your entire credit file, as is the case with mortgages.<br><br><div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">Be forewarned that not all CCC are the same. Make sure you go to a legit, preferably local, non-profit. All CCC should offer budget planning and financial education and not make promises about settling or fixing or repairing credit. Also, while some do charge a contribution of $10-15 a month, no legit CCC will ask for an application fee or charge you hundreds or thousands of dollars upfront. Be careful, don't get scammed. Sadly, many people are scammed each year by shady fly by night places that give the real places a bad name.</td>
</tr></table></div>
I absolutely agree with this. We were so blessed that we found a great company from the beginning. We used <a href="http://www.genus.org" target="_blank">www.genus.org</a> and have nothing but praise for them.
 

·
Premium Member
Joined
·
1,550 Posts
<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>wifeandmom</strong> <a href="/community/forum/post/7965839"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">That is *completely* untrue.<br><br>
Unfortunately. <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/lol.gif" style="border:0px solid;" title="lol"><br><br>
We were swamped with credit card offers after about a year of paying through a CCC service. I figure they started rolling in right about the time our utilization ratios dropped to a reasonable level.<br><br>
We managed to charge another very large sum of money on NEW credit cards while DH was finishing school, all while still paying the original amount to CCC. We added the new ones to the old ones for one much larger monthly payment and FINALLY paid it all off a couple of years ago.<br><br><br><br>
We got a conventional fixed rate mortgage at the lowest rate available with CCC still showing on some accounts, though they were actually paid off at the time. Our mortgage brokers actually told us we'd have been better off filing for bankruptcy, though I'm not sure I agree with that, and am glad we paid what we owed so I don't feel guilty about it.<br><br>
Our credit score slowly improved the lower our balances got, the older the late payments got, etc. It wasn't one big jump when we paid the last cards off.</div>
</td>
</tr></table></div>
I stand corrected. <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/orngtongue.gif" style="border:0px solid;" title="Stick Out Tongue"> However, some places have you agree to not open up new accounts. That was the case for someone whose taxes and finances I handle and for a couple we are friends with.<br><br>
As for the big jump, after it is all paid off, I have personally seen people's scores jump dramatically. Like from 530 to 650 in less than 2 months.<br><br>
There is a big myth running around that CCC=bankruptcy and that CCC=no mortgage for a long time. It is hogwash. CCC can be avoided and perhaps is good to avoid if possible but it can be a lifesaver for many families. A lot of the families I work with for my job are in CCC.
 

·
Registered
Joined
·
8,198 Posts
I found where it said that it could harm your credit score. MSN Money,<br><br>
"Here's another risk with consolidators you should know about: they have been known, in some cases, to make late payments or even miss payments, thus worsening your plight (and your credit record)."<br><br>
Here's a link to the whole article: <a href="http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P36230.asp" target="_blank">http://moneycentral.msn.com/content/...ebt/P36230.asp</a><br><br>
I'm trying to help my sister figure out how to send her son to college and have reading about funky financing foibles. <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/smile.gif" style="border:0px solid;" title="smile">
 

·
Registered
Joined
·
8,198 Posts
<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>oneKnight</strong> <a href="/community/forum/post/7963717"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">My DH used CCCS to get lower interest rates, lower monthly payments and take off the extra fees. It didn't affect his credit score. Probably depends on what kind of debt consolidation you do. CCCS is just a debt management plan.<br><br>
We boosted his score up by paying down all those bills (paid them off with the tax refund this year!) and adding his name to my CC's with good payment records. His score is higher than mine now!</div>
</td>
</tr></table></div>
But this is debt counciling, not debt consolidation, right? I know there is a huge difference. With counciling, they just give advice on how to lower payments, in the other, they are actually issuing a new loan to you (essentially buying all the loans you have) and you pay THEM one lump sum and <b>they</b> pay off your bills. I've never done either so, this is all from my extensive reading, which could be flawed.
 

·
Registered
Joined
·
1,944 Posts
We just started with In Charge <a href="http://www.incharge.org/" target="_blank">http://www.incharge.org/</a> and they've been awesome so far! It was a HUGE weight lifted off my shoulders when I got off the phone with them for the first time. My monthly payments (between 4 cards) was about $900. Now, it's $396. I honestly didn't think that the credit companies would want to do it, but I've been pleasantly surprised. On this plan we will be debt free in 4yrs 10mos. It's nice to see a light at the end of the tunnel, and we can always pay more if we have it laying around to pay it down even faster.<br><br>
Look on ripoffreport.com for any complaints on certain organizations. Do a search using they keywords "debt consolidation" or something like that. I found the same places have multiple complaints, but after 30 pages of searching I never found In Charge.<br><br>
They do have a $30/month "contribution fee" that in the small print says you can lower if you want or not pay at all (it is a not for profit company). And a one time set up fee of $30. I called and had them lower my mo. contribution to $15 while we are still trying to keep our heads above water. They were very happy to help me.<br><br>
Lastly, the way I see it, our credit score was going to go to crap anyways because we couldn't make those payments. So, it was not pay, file bankruptcy, or do a debt management program. The choice was obvious for us.
 

·
Registered
Joined
·
3,651 Posts
<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>velochic</strong> <a href="/community/forum/post/7966637"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">But this is debt counciling, not debt consolidation, right? I know there is a huge difference. With counciling, they just give advice on how to lower payments, in the other, they are actually issuing a new loan to you (essentially buying all the loans you have) and you pay THEM one lump sum and <b>they</b> pay off your bills. I've never done either so, this is all from my extensive reading, which could be flawed.</div>
</td>
</tr></table></div>
With CCCS they talk to the CC companies for you, get your rates lowered and fees taken off, and you pay the CCCS one payment that they pay your bills. They disperse payments on one day of the month, irregardless of when each bill is "due" so yeah it may be late, but the next month you are alaready paid "early". It's not a loan, but it's more than just "counseling" (which is just talking IMO). They call it a "debt management plan".<br><br>
The one DH used was recomended to him from a friend at work. They charged $15/month for regular office costs but otherwise they are non-profit.<br><br>
I guess DH got the credit score jump. I just figured it was from having his balances paid down.
 

·
Registered
Joined
·
8,198 Posts
<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>oneKnight</strong> <a href="/community/forum/post/7979044"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">With CCCS they talk to the CC companies for you, get your rates lowered and fees taken off, and you pay the CCCS one payment that they pay your bills. They disperse payments on one day of the month, irregardless of when each bill is "due" so yeah it may be late, but the next month you are alaready paid "early". It's not a loan, but it's more than just "counseling" (which is just talking IMO). They call it a "debt management plan".<br><br>
The one DH used was recomended to him from a friend at work. They charged $15/month for regular office costs but otherwise they are non-profit.<br><br>
I guess DH got the credit score jump. I just figured it was from having his balances paid down.</div>
</td>
</tr></table></div>
Okay, yes, this was what I was reading about. I was reading that it can be risky because if they miss a payment, you get that 30 day (or G*d forbid 60 or 90) late ding against your credit score. I had been reading that this has been a big problem and that while people are getting their bills paid, these services have no personal stake in getting things paid on time, so it can chip away at your score.<br><br>
According to these same articles, you are paying for a service you can do yourself, anyway... just call the credit card companies yourself and ask for a payment plan/reduction then make the payments yourself. That way you eliminated the middle man (extra fees) and the potential that something might not get paid on time.<br><br>
I've never done it, so I'm just going by what I've read. I've not read that getting the service itself would cause a credit score ding.
 

·
Registered
Joined
·
3,651 Posts
<div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>velochic</strong> <a href="/community/forum/post/7979120"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;">Okay, yes, this was what I was reading about. I was reading that it can be risky because if they miss a payment, you get that 30 day (or G*d forbid 60 or 90) late ding against your credit score.</div>
</td>
</tr></table></div>
well he already had that, so what's to loose?<br>
It helps if you go with a company that you know someone else had good success with.<br><div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">According to these same articles, you are paying for a service you can do yourself, anyway... just call the credit card companies yourself and ask for a payment plan/reduction then make the payments yourself. That way you eliminated the middle man (extra fees) and the potential that something might not get paid on time.</td>
</tr></table></div>
It didn't work for us. DH called and talked to his highest debt CC and they said that if he didnt' pay through CCCS that they would hike his interest back up to 30% (cccs got it at 9%) and give us all kinds of fees and charges. Maybe they're nicer to other people, but not to us.<br>
CCCS was saving us over $50/month in fees/interest even AFTER we paid them the $15, besides allowing us to pay less on the minimum payment.
 

·
Registered
Joined
·
8,198 Posts
I was just passing on some "watch out"s. <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/winky.gif" style="border:0px solid;" title="Wink"> Just something I read and something people can google for themselves. Glad you found the right solution for your situation, OneKnight. <img alt="" class="inlineimg" src="http://www.mothering.com/discussions/images/smilies/smile.gif" style="border:0px solid;" title="smile">
 

·
Registered
Joined
·
9,290 Posts
Yes, velochic - those things are possible. But, usually, if you're with a reputable company, they change the 'official' due date with the cc companies so you're not late.<br><br>
And, honestly, CCCS is usually the last step before bankruptcy, so credit scores are already low, payments are already late. A few more points won't matter to most people, IMO.<br><br>
In our experience, our credit score was only affected while in the program, but they were already low for the reasons I mentioned above. Once we paid in full, our scores started going back up fairly quickly.
 

·
Registered
Joined
·
8,198 Posts
Okay, but correct me if I'm wrong... counseling and consolidation are two different services, yes? One, they just advise about how to get a grip on your finances and the other they actually take them over for you?
 

·
Registered
Joined
·
808 Posts
Discussion Starter · #16 ·
Thank you all for your thoughts and experiences!<br><br><div style="margin:20px;margin-top:5px;">
<div class="smallfont" style="margin-bottom:2px;">Quote:</div>
<table border="0" cellpadding="6" cellspacing="0" width="99%"><tr><td class="alt2" style="border:1px inset;">
<div>Originally Posted by <strong>shelbean91</strong> <a href="/community/forum/post/7981058"><img alt="View Post" class="inlineimg" src="/community/img/forum/go_quote.gif" style="border:0px solid;"></a></div>
<div style="font-style:italic;"><br>
And, honestly, CCCS is usually the last step before bankruptcy, so credit scores are already low, payments are already late. A few more points won't matter to most people, IMO y.</div>
</td>
</tr></table></div>
What steps do you take when your over your head in bills but haven't started missing payments...yet?
 

·
Registered
Joined
·
9,290 Posts
Velochic- yes, there are counselors who just talk you through the steps. There is consolidaton that are new loans to consolidate all debts into one. CCCS (Consumer Credit and Counseling Service) is sort a blend of the 2, IME. They tell you what they can do, how to prevent from getting back into trouble and take over your payments. You pay them $x a month, you get a statement from them each month with all your creditors listed, how much money went to each and what the balance is.<br><br>
If you're in over your head but haven't started missing payments- you can try to get a 0% interest card and xfer all the balances to that one card. It will buy you some time. You can call your creditors directly and explain the situation- sometimes they will give you a few months of reduced interest or waive some charges if they know the CCCS is the next step for you. If you have student loans, you can put them in forbearance or deferment. If you have a car payment, sometimes you can do a few months of interest only payments and add the principal from those months onto the end of your loan. For a mortgage, sometimes you can do the same. If you have medical debt, call whoever it is you owe and negotiate payments.<br><br>
If you credit still isn't damaged, you can do a home equity loan, but as velochic says time and again, it's not the best idea to take secured money to pay for unsecured debt- especially if you're not changing spending habits.
 

·
Registered
Joined
·
2,035 Posts
yes, it will effect your credit. My dh has to have a bond for his excavating business and the bond company really questioned him when he did debt consolidation. We were afraid we were going to lose the bond. We didn't, but the company didn't like it.
 
1 - 19 of 19 Posts
Top