does taking you debt to a debt consolidation place hurt your credit?
me and my wife have about $17,000 in credit debt. im wanting to buy a house this summer, but am unsure if i should just keep trying to pay the cards down myself or take it all to a debt consolidation company? i don’t want my credit to get hit in a bad way if i do take it there, but if i don’t take it there i think my debt to income ratio will be to high to buy a house this summer? so does the debt consolidation thing really work and will it hurt me in any way(credit or payments)?
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You have to be on them like glue on fly paper! They can consolidate your credit by negotiating with your creditors for a “settled” account at a lower price, or reduced payments which they can send late. “Settled” on your credit report shows your inability to pay the original debt.
Do your research, and if you go this route, harass them.
if you do this it can hurt your credit if they make all go bad so they can settle. I would not do this but rather work on the smallest balance first and pay them off asap and the go up to the next
It will hurt you if you take it to a debt company that negotiates your balances with your creditors. If its a consolidation loan then it wont hurt. Either way you look at your situation you will still have the debt so your debt to income ratio will be the same, the only difference is that its consolidated. What i would do is take all the extra money your applying to all the cards plus any extra you may have laying around and put it all including the minimum payment to the balance with the highest interest, when that one is payed off apply all of that payment to the next highest interest plus min payment. Doing this will create a ‘snow ball’ effect and pay down the debt fast and save you money and interest. The only problem is that it wont be paid off this summer. doing this will increase your credit score though.
When we purchased our house the bank told us that the Debt consolidation was the worst thing we could do.
If your debt to income is too high this summer – then wait until next summer.
Better to pay things off than be house poor.
“Hurt” is not the right word for what it would do to your credit rating…..”ruin” is a better word….
STAY AWAY from any “debt consolidation” program that involves debt settlement. Debt settlement is a risky tactic where you pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator’s fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll off the dice with your finances…You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.