When you go to a credit counseling firm and they consolidate your debt, does that look bad on your credit?

Hi, It will not look bad on your credit report as long as you are paying the consolidated payment on time. Debt consolidation is a way to ensure that your credit score comes to proper level as well as ensure that you manage your finances better. A few articles that might help are given below.

Debt Consolidation - Get Out Of Debt

http://www.askaquery.com/Answers/qn1643.html

How to Hire a Debt Counselor?

http://www.askaquery.com/Answers/qn1584.html

What is Debt Relief?

http://www.askaquery.com/Answers/qn1583.html

Debt Management and Building Wealth

http://www.askaquery.com/Answers/qn1581

Building Wealth by Reducing Debt

http://www.askaquery.com/Answers/qn1578.html

How to Manage Your Credit Card Debt?

http://www.askaquery.com/Answers/qn1579.html

I have done this and currently am enrolled in a "debt management" program and they told me when I was signing up that it was a good thing and it would look good on my credit because creditors would see that I am taking "control" of my debt and I'm doing something about it. Well, when I tried to buy a house, they pointed out to me that I couldn't get a loan until I paid off the debt or made a a payment so as to lower the amount I owe to no more than 4 months of payments remaning, also when I went to buy a car it was the same thing, I was turned away by 2 car dealers because of just having my credit consolidated.

So in a nut shell, it does not look good on your credit and chances are you can't get any new credit while on it however I will say that the do sersiously help pay credit off a lot faster than if you just paid them on your own.

Good luck with it!!

It is frowned upon if you're looking to buy a new house or car right away, you'd be better off calling your creditors directly and asking for a reduced payment to settle debts.(Just make sure you ask them to report to the credit bureau as "paid" and not "settled".) However, it is better in the long run to use debt consolidation rather than not paying the debts at all.

Yes. It shows that you were unable to manage your obligations on the terms that agreed upon. For whatever reason, you required a 3rd party to assist you in paying your bills. A lender will look at this and think "this person needs help paying their existing obligations, why add to the problem by extending additional credit". It makes you look like a poor credit risk. On the other hand if you consolidate your bills into one payment and make the payment on time, your credit looks better.

Yes, credit counseling will reflect negatively on your credit report.

Oftentimes, these credit counseling/debt consolidation places will ask you to take over your payments. They will not make payments on your account so that they can try to settle with the creditor. This will ruin your credit.

This may seem like a quick fix, but ultimately you're not addressing the problem that got you in debt. Most likely you're in debt because you can't control your spending habits.

Therefore, I'd recommend that you get yourself out of debt. Consider the following plan:

1) Get on a written budget and use cash in areas where you typicall overspend (groceries, eating out, clothing, etc.)

2) Get $1,000 in the bank ASAP for an emergency fund

3) List your debt smallest to largest balance and pay on the smallest balance first. Make minimum payments on everything else. Attack the smallest balance with everything you've got. After you've paid it off, take that amount and apply it to the next debt in the list.

4) Sell stuff, get an extra job.

My wife and I teach a personal finance class at our church and we've been able to help several families eliminate a lot of debt fast.

The key to success is to change your attitude about debt (get mad at it) and get intense about getting out of debt.

Contact me directly for specific help and/or visit my website where I give advice on getting out of debt.

Scott.....

Yes it does because what your doing is getting another loan and putting another hit on your credit burro

Don't know