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  • debt consolidation Pennsylvania

    What happends to your credit when you use a debt consolidation agency. Not a loan. A company that works with the creditors, and gets your interest rates lowered, late fees stopped..ect. I know the agencies say they don't post anything on your credit reports. But what about the creditors??

    Just curious after seeing so many adverts on tv.

  • #2
    Debt consolidation agencies are very skilled in negotiating settlements from creditors. As a result, the amount of debt is significantly reduced. Your debt consolidation agency will be able to create a new loan with a significantly lower monthly payment. Be advised that this payment may be more than one of your average bills, but you must take into account that the sum of all your previous monthly bills combined was much more than this payment. For example, your new monthly payment may be $400, but your previous bills for the month totaled $940. You may write one larger check, but you will only write one check.
    Loanskey - the pioneer service provider in mortgage loan and personal loans in UK

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    • #3
      Many debt consolidation cos./agencies will report to the credit bureaus that you are in a "debt counseling" program & that they are accepting only partial payments. (reduced payments) If you apply for additional credit (ie loan), few lenders will grant a new loan when they know you aren't paying your current obligations in the manner you initially agreed upon with your creditors.


      You will no longer pay your creditors directly. All of your debts are consolidated into one manageable reduced payment to the debt consolidation company. The debt consolidation company in turn pays your creditors on your behalf monthly. That's the way it typically works with a debt consolidation agency.

      Some people go to a financial institution (ie bank, loan co.) & take out a loan (if they can get approved) & use it to pay off debt (usually credit cards) & pay the financial institution back for the loan. The loan usually has a lower rate of interest than the credit cards & you don't have to worry about late payments on several or more credit cards.
      Last edited by Betty3; 08-17-2007, 05:42 PM. Reason: add add'l. info
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