Reputable credit card debt consolidation / credit repair options?
June 15, 2022 3:53 AM Subscribe
I have significant credit card debt and desperately want it to be at least more manageable, at as low an interest rate as possible, until I can pay it off completely -- and to get trustworthy advice on how to start to get my credit score back again. I fortunately have no student loan debt, just the cards.
There are some past questions on this topic but I do not know if they reflect the current best options.
Thank you so much -- this is unfortunately quite time-sensitive. Please feel free to MeMail me if you want any more specific details.
For what it's worth, I love metafilter and one of my first moves once I get my financial house in order is to become a monthly donor again. But right now I am beyond broke and would be so grateful for any referrals that can be given. Or if there's a mefite with knowledge in the field who can speak to me directly a ~15 minute call, I would weep with joy.
There are some past questions on this topic but I do not know if they reflect the current best options.
Thank you so much -- this is unfortunately quite time-sensitive. Please feel free to MeMail me if you want any more specific details.
For what it's worth, I love metafilter and one of my first moves once I get my financial house in order is to become a monthly donor again. But right now I am beyond broke and would be so grateful for any referrals that can be given. Or if there's a mefite with knowledge in the field who can speak to me directly a ~15 minute call, I would weep with joy.
I used Consumer Debt Help to settle some debts after credit companies refused to negotiate interest. The biggest challenge here is it isn't great for your credit although not as bad as bankruptcy, and it takes awhile to get a settlement done which extends the period of time before you can both get new credit and improve your score. But ultimately it worked for me and my situation.
posted by aetg at 6:42 AM on June 15, 2022 [1 favorite]
posted by aetg at 6:42 AM on June 15, 2022 [1 favorite]
In my opinion, none of the "credit repair" services are truly legit; they range from outright scammers to groups largely funded by industry that aren't fully reliable when it comes to acting in your interest. You should especially avoid any that try to charge you up front, which is usually illegal under federal, and sometimes state, law. Least scammiest may be NFCC.
You can get a lot of good reliable basic information from the CFPB. Start with credit scores here. I would recommend reading up first before you call anyone.
I know how stressful this can be. Good luck to you.
posted by praemunire at 7:29 AM on June 15, 2022 [6 favorites]
You can get a lot of good reliable basic information from the CFPB. Start with credit scores here. I would recommend reading up first before you call anyone.
I know how stressful this can be. Good luck to you.
posted by praemunire at 7:29 AM on June 15, 2022 [6 favorites]
I got a consolidation loan from a credit union in my early twenties and paid all of my cards off. I also closed all but one of those accounts. I believe I did another loan a few years later to pay off another card but that was a less desperate situation, just a better interest rate. If you can join a credit union, they might have a financial advisor that can provide specific help to your situation.
For your credit, late payments are probably one of the biggest things that hurt your score. Avoid those at all costs.
posted by soelo at 8:32 AM on June 15, 2022 [2 favorites]
For your credit, late payments are probably one of the biggest things that hurt your score. Avoid those at all costs.
posted by soelo at 8:32 AM on June 15, 2022 [2 favorites]
nthing suspicion about "credit repair." Some of these folks that say they're going to fix your credit actually:
. call every one of your creditors
. dispute every transaction (even those that you would say "wait, that's totally legit"
. point to your increased credit score as evidence that they're "helping", because disputed transaction don't count against your credit score. Once the disputes settle, you're right where you started, less a little time, energy, and possibly their fees.
Sketch City.
The personal finance subreddit is a great place to start. If you don't need to buy a house, like, tomorrow, then "credit repair" is not even a thing for you right now. If you can qualify for a personal loan/line of credit, and use that to pay the cards so you only have one loan to pay down, that might simplify your life (and reduce your interest payments). If not, or if you prefer not to, then Snowball or Avalanche as fits your psyche.
posted by adekllny at 8:55 AM on June 15, 2022 [2 favorites]
. call every one of your creditors
. dispute every transaction (even those that you would say "wait, that's totally legit"
. point to your increased credit score as evidence that they're "helping", because disputed transaction don't count against your credit score. Once the disputes settle, you're right where you started, less a little time, energy, and possibly their fees.
Sketch City.
The personal finance subreddit is a great place to start. If you don't need to buy a house, like, tomorrow, then "credit repair" is not even a thing for you right now. If you can qualify for a personal loan/line of credit, and use that to pay the cards so you only have one loan to pay down, that might simplify your life (and reduce your interest payments). If not, or if you prefer not to, then Snowball or Avalanche as fits your psyche.
posted by adekllny at 8:55 AM on June 15, 2022 [2 favorites]
I used National Debt Relief for this back in 2017 specifically for one credit card, and I just pulled out my agreement:
- I had a little over $11k on that card
- They negotiated it down to a little over $5.5k
- With NDR's fees, I ended up owing almost $9k
So I got $2k knocked off my overall debt, and I got 27 months to pay it off with zero interest as opposed to 20%+ monthly interest. For me, I think it was worth it purely from an anxiety perspective, as it gave me a more regimented plan with a monthly amount and I got out from under the insane interest rate of the card.
As others have noted, you do take a hit to your credit. Mine was generally good before I used NDR, but the "non-payment" on the credit card that I worked with them on knocked it down I think in the 100 points range for 2-3 years.
posted by anotheraccount at 9:16 AM on June 15, 2022 [1 favorite]
- I had a little over $11k on that card
- They negotiated it down to a little over $5.5k
- With NDR's fees, I ended up owing almost $9k
So I got $2k knocked off my overall debt, and I got 27 months to pay it off with zero interest as opposed to 20%+ monthly interest. For me, I think it was worth it purely from an anxiety perspective, as it gave me a more regimented plan with a monthly amount and I got out from under the insane interest rate of the card.
As others have noted, you do take a hit to your credit. Mine was generally good before I used NDR, but the "non-payment" on the credit card that I worked with them on knocked it down I think in the 100 points range for 2-3 years.
posted by anotheraccount at 9:16 AM on June 15, 2022 [1 favorite]
GreenPath helped me out of debt. They were friendly and answered all questions easily.
posted by tiny frying pan at 9:31 AM on June 15, 2022 [1 favorite]
posted by tiny frying pan at 9:31 AM on June 15, 2022 [1 favorite]
We are signed up for Credit Karma, which shows you your credit score for free, suggests ways to improve your credit and shows you offers for loans and credit cards that you might qualify for. The loan offers generally show you how much the monthly payment would be on a particular amount, so you know up front if you can make that payment. If you need a lower payment, look for a loan where you pay back over a longer period of time, like 72 months. Once you find a loan that meets your needs, you can apply online and generally hear back fairly quickly.
I got a loan from them a while back to consolidate some credit cards and I have been very satisfied with it. Just to be clear, all it is is a personal loan where you use the funds to pay off your cards, and then pay back the loan with a monthly payment. This is not credit repair, nor do they negotiate with your creditors to reduce your balances. Still, if you qualify for a loan with a monthly payment you can handle, it's a pretty straightforward way to get some breathing room. You just have to be committed to not running up new balances on the credit cards.
posted by Serene Empress Dork at 9:40 AM on June 15, 2022 [2 favorites]
I got a loan from them a while back to consolidate some credit cards and I have been very satisfied with it. Just to be clear, all it is is a personal loan where you use the funds to pay off your cards, and then pay back the loan with a monthly payment. This is not credit repair, nor do they negotiate with your creditors to reduce your balances. Still, if you qualify for a loan with a monthly payment you can handle, it's a pretty straightforward way to get some breathing room. You just have to be committed to not running up new balances on the credit cards.
posted by Serene Empress Dork at 9:40 AM on June 15, 2022 [2 favorites]
I was in a credit consolidation program that I don't *think* was scammy. They did reduce my debt load and got the wolves off my back, and that was great. It got me on the way to paying everything off, which I've done now. But to do that, I had to close all my card accounts, and it tanked my credit score in a way I'm still rebounding from five years later -- I've had trouble renting apartments in the extremely competitive NYC market because my score is finally *good* now but not yet great. If you anticipate needing a spotless credit report over the next decade, stay away from the consolidation route. Take out a loan, pay the cards off, and leave them open.
posted by mirepoix at 12:17 PM on June 15, 2022 [1 favorite]
posted by mirepoix at 12:17 PM on June 15, 2022 [1 favorite]
GreenPath was recommended on twice on AskMeFi by other people. One person had been referred by their credit union. can help negotiate lower interest rates, help with budgeting. not a debt settlement program. I called to see if they could work with a friend and they seemed helpful although my friend didn't opt to follow up.
posted by metahawk at 3:00 PM on June 15, 2022
posted by metahawk at 3:00 PM on June 15, 2022
I got my credit card debt down to nothing by opening a card with a zero percent interest rate on balance transfers for two years. Then I transferred my balance to that card and aggressively paid down the debt.
posted by sevensnowflakes at 9:29 PM on June 15, 2022
posted by sevensnowflakes at 9:29 PM on June 15, 2022
Things that are always worth it to help your credit score:
* Pull all of your credit reports and dispute anything incorrect. If there are any dings that are associate with accounts where you are an authorized user, you can ask that those be removed as well.
* Pay your bills on time, even if just with minimum payments
* Experian boost, specifically for your Experian score, will take the history of one bill you pay on time (cell phone, utilities, streaming) and "boost" your score
Things that may or may not be worth it depending on your situation:
*If you rent, you can use a service that will report your rent payments to credit bureaus (this has a fee, so I would only do it if you know you need a better credit score imminently for something upcoming that you cannot avoid)
*If you know someone with better credit that wants to help you, you might be able to be added as an authorized user their credit card IF AND ONLY IF they pay off their card religiously. You do not actually need to use this authorized card. They don't even have to give it to you.
*Ask for higher credit limits to improve your debt-to-credit ratio. If your credit is suffering, though, you may not get them. Only if you trust yourself not to take on the additional debt - if you do end up charging more because of the higher limit, then it will only hurt your score (and you).
posted by mosst at 5:52 AM on June 16, 2022
* Pull all of your credit reports and dispute anything incorrect. If there are any dings that are associate with accounts where you are an authorized user, you can ask that those be removed as well.
* Pay your bills on time, even if just with minimum payments
* Experian boost, specifically for your Experian score, will take the history of one bill you pay on time (cell phone, utilities, streaming) and "boost" your score
Things that may or may not be worth it depending on your situation:
*If you rent, you can use a service that will report your rent payments to credit bureaus (this has a fee, so I would only do it if you know you need a better credit score imminently for something upcoming that you cannot avoid)
*If you know someone with better credit that wants to help you, you might be able to be added as an authorized user their credit card IF AND ONLY IF they pay off their card religiously. You do not actually need to use this authorized card. They don't even have to give it to you.
*Ask for higher credit limits to improve your debt-to-credit ratio. If your credit is suffering, though, you may not get them. Only if you trust yourself not to take on the additional debt - if you do end up charging more because of the higher limit, then it will only hurt your score (and you).
posted by mosst at 5:52 AM on June 16, 2022
On the advice of MetaFilter, I used GreenPath to consolidate some credit cards and a loan when the balances were getting too onerous to manage individually. I just made my last payment this month, and I wouldn't hesitate to recommend them.
Things I liked:
* They never made wild claims about reducing or eliminating debts. They were clear up front that they would seek concessions from creditors, but reductions were not guaranteed. Once your payment plans are set up, they are transparent about whether any reduction applies. GreenPath negotiated lower interest rates on my accounts than I would have been able to secure for myself.
* They function as a helpful buffer between yourself and creditors. You can ask a representative to seek a concession, modify payments, or adjust a scheduled payment, and they'll negotiate with the creditor on your behalf - not always successfully.
* Customer service was stellar. Easily the friendliest, most capable folks I've worked with in the last few years. Customer service is available through chat, and I think phone, and I was always able to speak to someone within a few minutes.
* They're flexible about your deposit schedule and amount. You have a fixed recurring deposit into a pool of money used to pay your debts, and the amount you pay is sometimes more than is needed to make all payments within a month (as your creditors have varying schedules.) You can work with them to safely adjust a payment and still meet your obligations.
posted by Transmissions From Vrillon at 7:30 AM on June 17, 2022
Things I liked:
* They never made wild claims about reducing or eliminating debts. They were clear up front that they would seek concessions from creditors, but reductions were not guaranteed. Once your payment plans are set up, they are transparent about whether any reduction applies. GreenPath negotiated lower interest rates on my accounts than I would have been able to secure for myself.
* They function as a helpful buffer between yourself and creditors. You can ask a representative to seek a concession, modify payments, or adjust a scheduled payment, and they'll negotiate with the creditor on your behalf - not always successfully.
* Customer service was stellar. Easily the friendliest, most capable folks I've worked with in the last few years. Customer service is available through chat, and I think phone, and I was always able to speak to someone within a few minutes.
* They're flexible about your deposit schedule and amount. You have a fixed recurring deposit into a pool of money used to pay your debts, and the amount you pay is sometimes more than is needed to make all payments within a month (as your creditors have varying schedules.) You can work with them to safely adjust a payment and still meet your obligations.
posted by Transmissions From Vrillon at 7:30 AM on June 17, 2022
I’ve used a nonprofit consumer credit counseling services - maybe it’s specific to my state (NY). Like credit unions - they’re good. They may be able to point you to similar services in your state. They assess what you’re able to pay monthly, you pay for five years, and they negotiate with the credit card companies on interest rate and, probably, reducing the overall debt.
posted by vitabellosi at 4:34 PM on June 17, 2022
posted by vitabellosi at 4:34 PM on June 17, 2022
This thread is closed to new comments.
Read this page from the Personal Finance subreddit. It's a great explainer on how to fully assess the scope of your debt, understand your debt, negotiate down your interest rates when you can, and make a plan for paying your debt down. Definitions of the avalanche and snowball methods are on that page.
I don't know how much debt you have (for some people, $5000 is an insurmountable amount of credit card debt, and then I know someone who's got close to $60k in credit card debt and is just kinda whatever about it). But since you describe yourself as broke I'd really recommend the snowball method for you: work aggressively to pay down your smallest debts one at a time, toward the goal of reducing the number of monthly payments you've got to make.
You can memail me if you want to go over some numbers. This is NOT my field, I am NOT an expert, I'm just preternaturally adept at personal finance and have helped a few friends make a debt plan in this way before.
posted by phunniemee at 5:06 AM on June 15, 2022 [6 favorites]