Charles NEED HELP PLEASE!! and anyone else

[muybueno]

Hi,
I am new to the message board *Credit info center) and I have read many of your posting and was very impressed with the wealth of knowledge that you had. I was wondering if you could give me some of your great advice concerning my credit dilema. I live in florida and back in Jan of this year I signed up to a debt settlement service that is with the BBB. I had three credit cards one with chase for 8500, and two with citibank 5500, and 8900.
The debt service said that they ususally settle for at least 50% of what you owe and of course the more they save you the more money they make. They also said it would take around a year to a year and half to get alll of the cards settled. They will start nego. as soon as there is enough money in my savings account ( witch is in my name) and they can not take anymoney out without my permission. So I put $8000 into the account, immediatley they take out the sign up fees and all that stuff which was around 1500. I then am scheduled to make $350 a month for a year, which would total around 12500 which is a bout half of what I owe. My questions are these:
1. My husband and myself are trying to buy a house, we currently own a townhouse which we want to rent out. OF course my credit had been declining. it was in the high 600's and now is 531. My husbands' is 617 he needs to needs to get to 620 for us to get a better rate. Any suggestions on how to increase his credit score a few points. He does not have any accounts which he owe money.

2. I thought by now that at least one of my accounts would have been settled. So I called the debt services and complained that I needed one of these accounts paid off because I am trying to buy a house so that my credit score will increase. They said that they had made a offer on all three accounts but they were not accepted. They then called back about a week later and said that citibank would settle on the 8900 account and would settle for 70% however the account balance now is 9876, and I would pay 6914 on top of that the settle ment cost that goes to the debt services for 607.. So an account that was orginally 8900 they want me to pay 6914 plus 607. I declined the offer. The debt service said that once the account goes to a CA that they maybe able to settle at a lower rate, but they could not guarentee this for sure and they even said it could go straight to a lawyer and I do not want this to happend because they could garnish my wages.

So what should I do? Should I try to get out of this debt services which i know there are penalties. OR stick with it? How can I get my husbands ( which I am sure would be easier) and my credit score to increase some for our interest rate on our loan.And lastly how long does it take for your credit score to change once you have fixed things.


Sorry for this to be so long but i really need your advice and anything else maybe that I did not mentioned feel free to ask.

Thanks so much

[firstsource]

I will start by saying that so far I have not heard anything good about these CCC companies. Most of them don't tell the truth, which is that their efforts are reported to the bureaus, and it is treated like a chapter 13 on your credit profile. Then most of them don't pay the bills on time, and then this one sounds like they are trying to make a living from you.

Ok, I am done with my ranting now. and on to your questions:

I would suggest that you get your money back from this company, because they have not done anything for you, did not settle for anything less, and have had 7 months to do so. They are not making payments on your accounts, it seems. I just hope for your sake that they have only taken the 1500, and not more. If you have the least bit of trouble with them, for sure report them to the BBB.

Now, your accounts have gone to the point that you are either in collection or close to that. You should be able to settle on your own for between 50 and 65% on the dollar. If you let it go further, you can get the amount down even further, but it will hurt your credit scores even more.
Whatever you do, make the deal, and get it in writing, that the accounts will be reported to the bureaus as "paid collection" accounts. If they are reported as settled, then your score will be hurt even more and in addition to that, you look worse to a lender with that "settled" note on the accounts.

To help your husband's credit scores, you have to pay down the debt that has his name attached (if it is your account, and he is an authorized user)It sounds odd, but if you are able to raise the limits on his cards, then it looks better, as the percentage of usage of the credit line is lower.

If any of these three accounts is in his name, then pay them off as soon as you can, or at least start making regular payments. If you can get your money back, take the 6500 that is left, (plus if you are actually getting the 350 per month credited to your savings account, then you will be back up to over 8500) and pay these 3 cards down to where they are manageable. If you can do this, there is a chance that the card companies will lower your interest rate for 6 months or a year. Most of them want to help you get back on your feet, if there is a chance that they will get their principal back.

Last but not least. 620 is a good score, but it is rarely good enough for a prime rate, so be ready to not get the rates you see advertized. Historically the rates even for sub-prime are great rates, so your timing is great to be buying a new home.

Charles

You will be able

[kb9tbq]

These Debt Settlement Companies are a totally different animal from the Credit Counseling Companies!

If you can imagine a CCCS program looking like a chapter 13 bankruptcy on your credit report, then double that to what the settlement company is going to make your credit report look like.

Charles is definitely right; that lenders rather see paid in full instead of settled. If you think about it the CCCS is a bit better because the lender will get all of their money (they choose to forgive a portion of the interest). As with settlement - they did not get all the money owed to them.

These companies are not in the business of settling when you think they should; they are more apt to wait forever if possible, untill all of your accounts have charged off!. Even worse then that they will wait until you start seeing notices to appear in court. Then they step back in to do there work.

They are not in the business of helping your credit, they wreck total damage before they are done, that is for sure.

If you have plans to apply for a house, your really need to let this company go, take your loses and try to save your relationship with the creditors to get back up on your credit. Unfortunately your scores are most likely going to take a bit more of a hit before this is all over. But if you can reabilitate your relationship with these lenders you will be stronger coming out of this in the end.

Also, here is a link to another current member trying to back out of her mess with one of these such companies: Dark04 and there is a least one or two more member floating around that can help you.

http://debt-consolidation-credit-repair-service.com/phpBB2/viewtopic.php?t=146

[firstsource]

So this is worse than I thought.
I had the hardest time writing my reply last night, I got so upset that I was not able to get my thoughts written down clearly enought to answer.

Please do report this company to the BBB as it sounds like they, and their kind, are misleading the public a lot. I hope that enough complaints happen that when they advertise they have to tell the real results.

Charles

[muybueno]

Okay, I have decided to on monday to call the debt service company and see what happens if I tried to get out of the program, eventhough they claim that when a credit card it settled that on my credit report it will show paid in full (don't know how true this is). If I get out of the company ( i am sure there will be some penalities) what is my first step? I still think that all three cards are with the OC and have not gone to CA. IF i speak with the OC I am sure that they will make me pay at least 70% which I can't afford. SO should I wait until they go to the CA and if I do what do I have to do or say? I AM REALLY LOST AT WHAT TO DO OR SAY TO EITHER THE OC OR THE CA. IF it goes to the CA I am assuming that my credit will go down even more.

My husband is not on any of the credit cards. THis is the werid thing about his credit. Last month when I spoke to someone about the mortgage they said that he a credit score of 623. We had pulled his credit report from a friend who works for mortagages and he said that had a past account with proggressive insurance, which we did not know he owed. So we paid this about two weeks ago. The lender told me to call back after one week since it had been paid because progressive says that they update weekly the reports. Well to be on the safe side I waited two weeks, to call the lender back. Once I called him he said that my husbands score had dropped from 623 to 616-- HOW, in the world can this happen???? I was really upset because if my husbands score could increase to 650 then we would only have to put 10% down and the and have rate around 5.5% this is with my credit as is. TO make matters worse is if my husbands score would have stayed at 620 ( which was the cut off) the lender said that we could have had a rate of 6.2% with 10% down. Now that it is at 616 he said that we are now looking at a rate in the 7's---I am so depressed. IF we just would of got the loan three weeks ago we would be in better shape!!!

I have seen a couple of website that show you have to raise you credit score in less than a week it is ebook that you can download at it cost about $11, are these things worth it or are they just another ripe off??
I think one of the websites is www.bestcreditever.net ( I think this right).

So what do you suggest I do?? I am more concerned about getting a decent interest rate for my mortgage. Again thank you for all your advice

[muybueno]

the web address was wrong. It is www.thebestever.net

[firstsource]

How could your scores drop like that? Well, 2 easy to answer reasons.
1) Every time you run your credit, it takes a "inquiry hit" to your score. The first time is the biggest, then only a little one for the others done in the next 14 days. This is why I suggest to clients that they offer to pay the loan officer the cost of the report, and having them send the report to them. Then as you present your situation to other loan officers, you can just take out your SSN and they can see what your situation is. I personally go one step futher and don't let the lenders that I submit loans to, to run credit, until I have decided which one I am going to place the loan with.

2) Your scores are the highest between the 10th and the 15th of the month. The creditors have received their payments and posted them, and the amount of new charges have not been reported yet.

Glad you are taking charge of your credit profile.

Charles