If your credit is bad should you consolidate your bills?

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My best friend has alot of debt. She just used one of those consolidation places, using a number off the tv, to have one monthly payment and they reduced her total debt. Is this a good decision?

I have some debt and I want to do this but I am afraid my credit will be worse. My credit is already bad for past due accounts in collection status. No I wasn’t a deadbeat..I has surgery and couldn’t pay my bills and them the minimum balances kept snowballing. Some of my friends say it makes your credit worse but I think paying it off would be better than not paying it. Anyone have a real answer on this? Thanks.

7 Comments
  1. Reply
    Baby
    November 10, 2011 at 5:46 pm

    yes and no, look in to all that you can befor you do that.

  2. Reply
    Bob P
    November 10, 2011 at 6:40 pm

    Go to Yourcreditattorney.com

  3. Reply
    Larry
    November 10, 2011 at 7:12 pm

    I believe that to be just another gimmick. You could do that yourself with a budget instead of increasing your debt by paying somebody else to do it for you..

  4. Reply
    jeanimus
    November 10, 2011 at 7:49 pm

    If she got an IVA then it should improve her credit rating because it will show each debt as settled, and the IVA as up to date.
    If she got a consolidation loan it will show the same thing, with the loan up to date. However she probably still wont get credit because she has had defaults on the original debts, which will show for 6 years.
    If you just dont pay your debts, your credit rating will show lots of current defaults.
    But you should get independent advice as to your particular situation as you may not be eligible for the same kind of deal she got. Plus the ones off tv cost a lot of money, even if they say the advice is free. The advice may be free, but setting it up wont be. You’ll probably have to pay either up front fees, or a monthly fee, or both.

  5. Reply
    Wrong!
    November 10, 2011 at 8:19 pm

    I got a second mortgage out for that very purpose and it hurt my credit score. In some ways it does not make sense. the credit cards costs $ 500 a month, and consolidation over 20 years cost $ 300. that’s a net savings to me and now I can pay the bill off in half the time. But it showed up as a negative on my credit score. the real deal is to cut the cord and get out of debt by any means necessary. It is a debt trap!

  6. Reply
    aloneathome
    November 10, 2011 at 8:25 pm

    I went through one of those places and it made my credit better, because at least something was being paid on the bills instead of nothing. I can’t remember who I went through, it has been about 10 years. But think about it, if you can have some of the interest dropped because most places will have the interest cut in half, the bill is getting paid how can it make your credit even worse? Just remember not to make more debt until the bills are paid.

  7. Reply
    Jen G
    November 10, 2011 at 8:34 pm

    Usually debt consolidation is only treating a symptom and not really a solution to paying off your debt. The best thing you can do is to set a budget, in writing on purpose, and then look for any place you can cut your expenses.

    Then any extra money you have, put towards your debts. Focus on the smallest one first, while making minimum payments on the others. Then when that one is paid off you take the payment you were making to that and add it to the next smallest, and keep working up through your debts. Then you’re free and clear of the debt.

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