debt consolidation...debt relief or a scam?

[Peter]

I keep seeing these ads where you can consolidate all of your debt into one monthly payment and have your interest rate reduced. But is this the same as a settlement? Does it affect your credit as badly as declaring bankruptcy would?

[Vindicar]

Debt consolidation is obtaining a new, lower rate loan to pay off all your other debts. This will actually positively effect your credit rating. Debt restructuring - or credit counselors, will hurt your credit rating and are often scams.

[Furball808]

SCAM!!!!!

I did this already and it was suppose to up my credit score.. IT DOESNT!! and mine was thru United Way which is a world known non profit center. They force you to close out all your credit cards.. You are NOT suppose to close out your credit cards or it will reflect your credit negatively..Once you get a zero balance your suppose to leave them open but cut your card it shows that you are able to keep an open credit a zero. Closeing them only makes it worse and makes you start over basically with your credit. 6 years later and I still have bad credit because of it.

From the link below:

8. Don't close an account to remove it from your record.
It’s a myth that closing an account removes it from your credit report. This is untrue—even closed accounts remain on your report, possibly for an indefinite period of time and may still be factored into the score. In fact, closing accounts can sometimes hurt your score unless you also pay down your debt at the same time.

[jinny]

1. Debt consolidation really works best when you have a house that you can refinance and pull money out to pay debts, provided the interest on your house is lower.
2. The ads you see are typically refered to as Consumer Credit Counciling. This can and will negatively affect your credit score. Similar to a bankruptcy when new creditors are concerned. They view you as high risk because you could not manage your own debts. Its not a scam but it can hurt you. They will settle your debts for you but not in a way that will help.

[halit_kasim]

It is WORSE for your credit than bankruptcy. It shows you are irresponsible with your money and still owe. (With bankruptcy you are irresponsible but at least you don't still owe the money.)

[MystikShadows]

Joycee, your problem was you got terrible advice from an untrained credit counselor. The system works if you know and understand the game.....which unfortunately you didn't learn until after it was too late.

That's why I'm here....trying to educate people.

Debt consolidation is different then "debt repair".

Consolidation is a fantastic way to fix a debt problem......IF you do it right. The biggest mistake people make is getting a loan and paying off all their credit cards and other high interest loans....then they turn right around and run up those now-empty cards all over again. Now they are twice the amount in debt and end up filing for bankruptcy. NEVER get a consolidation loan until you understand this, and know you must discipline your credit spending.

Home equity loans are best, but you are now putting your home at risk if you don't repay it.

A consolidation loan can have a negative impact on your score, because you are now increasing your total credit limits. Creditors do not like to see you with a lot of available credit if you income can't support it, and that will hurt your score.

What I suggest is after you have paid off your credit cards, get the credit limits lowered as much as possible (I suggest $200 if they will let you)....but keep one card with a higher limit for emergencies. This will balance out your consolidation loan and lower the credit score impact.

After several months of good payment history it will be back to normal.

[red_avater]

You should use "Credit Solutions" to settle your debt.They managed to reduce my debt up to 58% and avoid bankruptcy.It's legitimate .I came accross this company on NBC News Special Edition.Check it out here:
http://www.kqzyfj.com/click-1813149-10467845

[Teenschen]

Opt for a debt consolidation loan: The easiest method of getting a debt consolidation loan is to utilize the equity of your home. Equity of your home is calculated and determined by the difference in the amount you have paid and the amount you owe. If the amount you have paid is more than the amount due, you can use it as collateral. This allows you to borrow money on lower interest rates. Besides, you also get tax benefit on this type of loan. Consult your tax advisor before opting for this loan.

[GabriellaWardwbgik]

Not bad to pay the credits in the end of the month and reducing the intrest of the month is good.

-----------
Emma
Debt Consolidation

[GabriellaWardwbgik]

Looks awesome to see.

...................
Binu
Social Media Markting