Thanks very much to you all for your help

I really appreciate it. Many of you stated that i can do what the credit counselors can do myself without paying the fees.

The consumer credit counselors i spoke with said they would waive their fee which was appx. $35. I’m not aware of any other fees. I have Citibank and they told me they could get my credit card interest rate lowered to 0. They offered very reasonable payments and i’d be done paying in 3 years. Do you really think i can get a similar offer by asking them myself to lower the interest rate? I’m willing to try but they have some deal worked out w/ccc and i doubt i can come close.

My dilemma is that i don’t want signing up with the ccc to have a big impact on my credit score. However i know that it’s important to get the debt paid off the best way i can. I’m trying to figure out what the lesser of two evils. Which will have the most impact on my future. sigh. Any advice will be appreciated.

The CCC’s have the ability to reduce or elminate your APR, elminate over the limit fees, late fees and bring your account current and reduce your pymt. They also act as the liason between you and the CC. The counselors have more pull and can get more done. With a CCC or DMP you will pay once a month to the creditors.

Watch for fees. The $35 might be an upfront fee and then you might have to pay a percentage. Make sure you fully understand the fees.

Signing up with CCC does not change your score but changing terms with your creditors does. Your credit score is based on reports by your creditors.

So whether you do it through CCC or on your own it is the same. A small short term dip that allows you to get things paid off quickly is better then lingering debt. Your credit score changes with each report from a creditor.

As you pay things off your score will go back up. I don’t know the exact formula but the way I know it to work is creditors report to the credit tracking agencies (3 of them). Each report depending on what it is (on time payment, use of credit, slow pay …..) effects your score up or down. So while changing terms will get you a slow pay report, as you pay things on time your score will go up, as you use less and less credit your score will go up. So if you can balance the good with the bad then your score might not be that much different in the end.

Hypothetically let’s say you loose 3 points each time you use $100 of credit, each time you make a payment $100 of credit on time you gain 4 points. If you have a slow pay report you loose 4 points.

Again I don’t know the exact formula but I do know you gain points each time you use credit and pay it on time. You loose points as you accumulate debt.

You loose more points each time you pay late. The people with the highest credit scores use lots of credit but pay it off Monthly. People who never use credit have low credit scores but it does not take much to move up to the higher ranks if you pay it off monthly and have no outstanding debt.

Things that affect your credit score

– outstanding debt

— slow pay

— no pay

+ paying on time

++ lowering outstanding debt