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When a person consolidates, how much damage is done to their credit?




That depends on which program you chose. debt management Plans and debt settlement Plans affect your credit differently.

Debt Management Plans are administered by a credit counseling company. Those programs don`t hurt your FICO score but will show on your credit report you are in a program. Basically it protects that person from getting more credit cards and loans while trying to get out of debt. Once you complete the dmp it comes off your report as if you were never in the program.

Debt Settlement plans do affect your FICO score because your accounts have to be past due at least 120+ days for the creditor to be willing to settle. This is a hardship program for people who are overextended and their bills are already delinquent or about to be so the fact it would hurts your score is irrelevant. This program should be your last option before bankruptcy.

Sub: #1 posted on Sun, 07/13/2008 - 02:55

mobile0311 mobile0311
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