Debt Consolidation

General Information

When to Select Debt Consolidation - Criteria

Debt consolidation is the most benign and responsible way to seek debt relief when suffering a financial crisis.  A good credit counselor asks several questions when consulting with you about your financial situation.  These considerations are as follows:

• You must be able to afford your new monthly payment through debt consolidation.
• You know that you cannot get out of debt making minimum payments at high interest rates.
• After making those minimum credit card payments, you have very little money left, if any.
• You are not purchasing a major asset within the first year of your program.

Necessary concessions:

• Did you know? Credit Counseling is NOT factored into your FICO® score! This info comes straight from www.myfico.com. You can read this yourself by clicking on the link, then on Credit Education. Click where it says "What's not in your score". This will give you a list of items that FICO® does not take into consideration when calculating your FICO® credit score.
• Are you currently past due on your credit card bills? Did you know debt consolidation can sometimes bring those delinquent accounts back to a current status? Through a Debt Consolidation program, many creditors may bring your accounts back to a current status after making 3-6 consecutive and on time payments through the program. Most of the time there is no need to make those higher minimum payments for this to happen.
• While in debt consolidation, your credit card accounts will be closed. Creditors are willing to reduce your interest rates through the debt consolidation program but they will not allow you to continue to use the account at the lower rate. In some circumstances you may leave an account out of the program and continue to use and manage it on your own. You may be able to obtain new credit when you complete the debt consolidation program if you adhere to the program requirement.
• You must be committed to your debt consolidation.  If you skip your program payments, some of your creditors might disallow your participation in debt consolidation for an entire year and even more in many cases.  This, however, largely depends on the creditor.  Most creditors are not so harsh.
• You will not be able to obtain additional credit during the term of your debt consolidation program.  However, a major asset purchase, such as a home, is possible after approximately one year of participation. Again, your FICO credit score is not affect by the debt consolidation (credit counseling program) but most lenders want to make sure you’ve been making all your payments on time before giving you a major loan.
• Most consumers ask, “How do I know this is actually working the way you say it is?” Easy, you will still receive your monthly credit card statements from your creditors. These statements will show the payment the creditor received that month, your new interest rate and your balance just like normal. You can monitor the status of your debt consolidation either online or through your creditor statements.

When choosing a debt relief company, it’s important to go with a reputable company. Consumer Debt Solutions, Inc. has been around for almost 10 years. Not only do we assist our clients in prequalifying for free debt consolidation, we also offer our clients the tools needed to become debt free and stay debt free. When you become a client of Consumer Debt Solutions, Inc. you receive a 12 Page Fully Personalized Financial Analysis. You will also receive credit monitoring software. The monitoring software will actually send you a monthly e-mail with your credit score. Not only that, but it also includes $25,000 worth of Identity theft protection and fraud monitoring. Finally, we provide our clients with online budgeting software. This will help you create a monthly budget and will help you stick to it. At Consumer Debt Solutions we are dedicated to finding a debt solution that’s right for you!

Stay Informed.  Remember, the largest debt you owe is to yourself.