No financial planner would ever recommend a mortgage refinance (one form of debt consolidation) to get out of credit card debt. It is substituting secured debt for unsecured debt and you could lose your home over a bunch of unsecured credit card debt if you get injured or can’t afford your new higher monthly payments.
Also, and these are verifiable published reports, 77% of all of the individuals who refinance their way to avoid it of personal credit card debt are back during the level that is same of card financial obligation 2.5 years later on average only now with less equity in their home. Therefore it obviously isn’t fixing the issue.
Because no behavior modification ended up being required. It was made by you too easy on them to just refinance out of cc debt. No planner that is financial ever advise that route.
In settlement though they need to go without the need for charge cards for just two to three years and do go through behavior modication as does an alcoholic in rehab. Next, credit counseling entries on your credit history are as bad as bankruptcy entries they are going to crash your FICO for ten years and just take you from a 700 FICO down to low 500’s literally instantly.
Debt settlement on the other hand is only a pay that is late your credit report. Late pays bring down a 700 FICO about 40-50 points, they bring down 600 FICO’s about 30 points, and bring down 500 FICOs about 10-20 points. But more importantly, the FICO goes back up more than the drop from late pays than it was before they joined a settlement program even with the late pays on there, but we demand a withdrawal of the late pay entry as part of the negotiated settlement and get that 99% of the time as we eliminate the debt so their debt to income ratio goes down to zero and their FICO is back up higher.
Superior Debt Relief is the debt that is only business that will pay for three degrees of credit renovation afterwards to create the FICO up even greater.
Settlement is among the techniques employed by home loan consolidation visitors to get someone qualified into a true home that has been denied funding because of excessive of a debt to income ratio.