I have a low credit score and need help getting it back to a respectable number. Is going to a debt consolidation company a good idea? Does it come with any negative results later?

Debt consolidation, in the forms I have seen, destroy your credit. They tell you to stop paying your creditors until they write off your debts to collectors who will bargain with you. So if you have $10,000 in debt, you may be able to settle for $3,000. To do this, you put up with collectors until you have saved enough money to settle with them. Then, once your credit has a score just shy of bankruptcy, but all of your bills are paid, you wait 7 years for all of that nasty stuff to drop off and then start new. Most companies will try and get the collectors to call them instead of you so you don't have to deal with them. What do the consolidators get? They get a % of the money they say they will save you. They of course get it up front in the form of a monthly draft from your checking account. The only thing they offer in the way of repairing your credit is the offer to forward an appology/explainatory letter to the 3 credit agencies, which is really pointless unless you had your identity stolen or something like that. If all that doesn't sound to bad, forgo the collection agency. They don't do anything you can't do yourself.
Your only chance of helping your credit not get any worse is to work with the original creditor until it is resolved. You need that "paid as agreed" to appear every month no matter what it takes.
Good luck.

They will not help build your credit and most will not even be of much use in settling your debts. If you deal with any they will not be asking for any large payments up front and a big red flag is if they say the first payment goes to them

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Originally Posted by mishka1

debt consolidation, in the forms i have seen, destroy your credit. They tell you to stop paying your creditors until they write off your debts to collectors who will bargain with you. So if you have $10,000 in debt, you may be able to settle for $3,000. To do this, you put up with collectors until you have saved enough money to settle with them. Then, once your credit has a score just shy of bankrupcy, but all of your bills are paid, you wait 7 years for all of that nasty stuff to drop off and then start new. Most companies will try and get the collectors to call them instead of you so you don't have to deal with them. What do the consolidators get? They get a % of the money they say they will save you. They of course get it up front in the form of a monthly draft from your checking account. The only thing they offer in the way of repairing your credit is the offer to forward an appology/explainatory letter to the 3 credit agencies, which is really pointless unless you had your identity stolen or something like that. If all that doesn't sound to bad, forgo the collection agency. They don't do anything you can't do yourself.
Your only chance of helping your credit not get any worse is to work with the original creditor until it is resolved. You need that "paid as agreed" to appear every month no matter what it takes.
Good luck.

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Quote:

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Originally Posted by Mishka1

Debt consolidation, in the forms I have seen, destroy your credit. They tell you to stop paying your creditors until they write off your debts to collectors who will bargain with you. So if you have $10,000 in debt, you may be able to settle for $3,000. To do this, you put up with collectors until you have saved enough money to settle with them. Then, once your credit has a score just shy of bankrupcy, but all of your bills are paid, you wait 7 years for all of that nasty stuff to drop off and then start new. Most companies will try and get the collectors to call them instead of you so you don't have to deal with them. What do the consolidators get? They get a % of the money they say they will save you. They of course get it up front in the form of a monthly draft from your checking account. The only thing they offer in the way of repairing your credit is the offer to forward an appology/explainatory letter to the 3 credit agencies, which is really pointless unless you had your identity stolen or something like that. If all that doesn't sound to bad, forgo the collection agency. They don't do anything you can't do yourself.
Your only chance of helping your credit not get any worse is to work with the original creditor until it is resolved. You need that "paid as agreed" to appear every month no matter what it takes.
Good luck.

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Hi mishka!nadeus ti znaesh ruskiy mne nujna info about consolidation kak bi eto s toboi obsudit personaly?