Anyone done Credit Counseling/Credit Consolidation?

ByeBabyBunting

So, I did some research into credit counseling and I have listened to a bunch of NPR stories about it and I did the initial phone counseling session. they are recommending that I consolidate my credit cards with them and pay a set monthly payment. The company is the only one NPR recommends (NFCC.org), so I do trust them to a degree, but I know there are some shady companies out there who do this service too. It all sounds good, but I don't know anyone IRL who has done it, so I am hoping you can share your experiences? TIA

MJN9510

I was told that those type of things take just as bad a hit on your credit as a bankruptcy does.  I thought about doing it once, but I dont want my credit to take that bad of a hit. 

PrincessFiona9

I work for a major credit card company and we do recommend NFCC for those who are in extreme hardship situations and they've already exhausted the options we can offer.

I have heard that if affects your credit score similar to a chapter 13 BK but I don't have any experience with that.

tarebear9891

I think sometimes I can be beneficial and sometimes not(depending on if you are going to end spending more in the long run in interest.

After my oldest was born sick we had a lot of debt and someone tried to talk us into doing that. Some of our bills were interest free so it didn't make sense. We used the  snowball effect to get out of debt. We arranged all of our debt from highest to lowest. You concentrate on paying the lowest of first while still paying all the minimum payments on the others. When the lowest is paid off you put the money you were paying on it to the next highest and so on. Hope that helps!

ByeBabyBunting

From what they said it shows up on the credit score, and it would make it hard to get credit cards, but if we needed a secured loan for something like a car it would actually be easier given our current credit situation. Since we already have our cars, and own our home, I am hoping that we won't need to use our credit for a while. 

jess60

I used Consolidated Credit something or other for a time but then couldn't even make those payments.  I filed chapter 7 bankruptcy after that & it was by far the best decision for me & my circumstances.  I was able to get a car loan within less than 2 months of the bankruptcy being finalized which is now helping me rebuild my credit.

Most law offices should offer free bankruptcy consultations.  It might not hurt to look into that as well if you're already looking into consolidation programs.

GL!

ByeBabyBunting

jess60:

I used Consolidated Credit something or other for a time but then couldn't even make those payments.  I filed chapter 7 bankruptcy after that & it was by far the best decision for me & my circumstances.  I was able to get a car loan within less than 2 months of the bankruptcy being finalized which is now helping me rebuild my credit.

Most law offices should offer free bankruptcy consultations.  It might not hurt to look into that as well if you're already looking into consolidation programs.

GL!

Thanks!  I don't think we're quite at bankruptcy. We are paying our bills, but there is NO extra, and it is going to take us 100 years at this rate to get the credit cards paid. The advantage of this is that our total monthly bill goes down by $60, but more importantly, it can all be paid off in 4 years. And I understand that it will *** up our credit, but I feel like only making minimum payments is doing that for us too ... I wish I could win the lottery! 

Raspberry807

I did this because I was a single mom just barely making the minimum payments.  The counseling service contacted my two credit card companies and got them to reduce the interest rate, and I pay one sum to the counseling service monthly.  It took 5 years to pay off, but it's one amount per month and I have an end in sight (next Sept!).  I saw it as the only way I could get my head above water and still take care of my kids.

It did not affect my credit score negatively... I was able to purchase my home on my own a year after starting, and the last check of my score showed it's gone up even more since then and is in the excellent range.

ByeBabyBunting

Raspberry807:

I did this because I was a single mom just barely making the minimum payments.  The counseling service contacted my two credit card companies and got them to reduce the interest rate, and I pay one sum to the counseling service monthly.  It took 5 years to pay off, but it's one amount per month and I have an end in sight (next Sept!).  I saw it as the only way I could get my head above water and still take care of my kids.

It did not affect my credit score negatively... I was able to purchase my home on my own a year after starting, and the last check of my score showed it's gone up even more since then and is in the excellent range.

that is awesome to know - thank you!