Tag: consolidation

Do you have a Management Plan Debt hurt your credit score?

I'm thinking about getting credit counseling and enroll in a plan debt management. But I want to know if it hurts your credit score. It seems that there are so many scams out there now.

Yes, participating in a plan debt management through a credit counseling agency will hurt your credit, though probably not as much as other alternatives. However, a plan of debt management will be slower, cost a great deal more, and not significantly reduce your monthly payments or balances (but interest rates probably be reduced). Usually, you end up paying 100% of what you owe, plus interest, but at a lower rate. If it is a good idea for you will depend largely on the amount of debt you have, your ability to make the monthly payments, and the importance of your credit score is for you (and much more are willing to pay for trying to maintain). Let me give some examples: Borrower # 1 is only $ 5,000 in unsecured debt. A management plan Debt can be a good solution if you can make payments. He completed pay in full $ 5,000 plus interest, plus fees credit counselor, " But credit must not hold as much damage as a company had retained the debt settlement payments of its creditors for months or years, hoping to force agreement. If this borrower, payment of the debt may have only reduced the balance of $ 1,000 – $ 3,000, which is a small consolation to have your score credit in the trash. In addition, fees to the debt settlement company is likely to eat a good portion of those savings. But let us see a different example … Borrower # 2 owes $ 70,000 in unsecured debt. Say the DMP (plan of debt management) is able to reduce your interest rate of 19.9% to only 5%. In 60 months plan, your monthly payment (not including fees for credit counseling) would be $ 1,321. This results in a total of $ 79.260 (consultancy fees of credit) to pay the debt to the reduced interest rate under the DMP. Your credit is damaged while in the program, but perhaps not as significantly as another type of program to reduce debt. But what is the cost? Let's say that another type of debt reduction program is able to resolve their debt to 45% of must, without additional interest that apply. That debt is now $ 70,000 can be removed for just $ 31,500. And if she can manage to pay the $ 1,321 per month while under the DMP, eliminate your debt in 24 months (compared to 60 months in the DMP). So his credit is hurt by two years, but she is now free of debt, and has three years to repair and rebuild to make all payments on time. So let's look at where Borrower # 2 would be the end of five years in each option … with the DPP, has just made your last payment (for a total of $ 79,260 plus fees), is now debt free and leave your credit profile damaged. Under the alternative program, your credit report shows that the way she was behind on payments three years ago (which significantly impacted your credit score) but has been free of debt and making payments on time during the past 36 months (which has helped to rebuild their credit.) Oh, and incidentally, saved about $ 50,000 choosing this option on the DMP. So you can see it really depends on your personal situation either through a credit counseling DMP is a good idea for you. If you only a small amount, can be a good option. But if you have a significant amount of unsecured debt, you may want to compare the cost DMP face additional savings can be achieved through a choice of debt resolution. However, I DO NOT recommend choosing any debt settlement company but not for the reasons that most people suggest. I will advise you not to choose a debt settlement company because – even if it does (somehow) find high integrity, ethical debt settlement company – not a superior alternative: debt resolution. The concepts are similar, but due to resolution Debt is a program managed firms (as opposed to a private comany), provides inestimable benefits that the solution to the debt simply can not offer, and a lower cost. There is no space to review the differences here, but you can check out my answer to this question (copy and paste into a window new browser): http://answers.yahoo.com/question/index; _ylt = AhQIdMaQHurT6MMwgtm9FM7ty6IX; _ylv = 3? qid = 20100301082225AAYrSCm & show = 7 # profile-info-To s1OLajFVaa more information on how you can reduce your unsecured debt by 55% (guaranteed) and reduce your monthly payments by 50% or more, and do the same time avoiding harassing calls from creditors, surprise tax bills, and exorbitant fees, visit www.BetterThanDebtSettlement.com

Debt Management from Consolidated Credit Counseling Services