CBS 6 Answers Team: Credit

CREDIT

KARYN DETTBARN
Consumer Credit Counseling Service (Albany, NY)
518-482-0203
www.credithelpny.org

Below are some of the questions sent to Answers Team member Karyn Dettbarn during the CBS 6 live webchat Wednesday. Check back for more from the Answers Team in the coming weeks!

CBS 6 VIEWER: Can you tell me if "In Charge Debt Relief" is a credible company?
KARYN DETTBARN: To find out if a credit counseling agency/debt relief company is reputable or not I would suggest going on www.nfcc.org. This is a National Organization that has over 115+ certified and accredited organizations throughout the U.S.
CBS 6 VIEWER: Do these debt relief companies really do what they say?
KARYN DETTBARN: Debt relief means that you will not be paying the entire balances that you owe on your debts - or they will also call it a debt settlement. You would really need to do you homework on the organization prior to agreeing to any services that they offer, and the NFCC (National Foundation for Credit Counseling) is a great place to start.

CBS 6 VIEWER: I need a recommendation for a debt management service. We have together over $20,000 in credit card debt, as I had lost my job.
A-TEAM KD: Ok, are you up to date on your payments to your credit cards?
CBS 6 VIEWER: No I've been behind since June as I lost my job at that time. I'm back to work but it's hard to catch up with the oil budget and the first and second mortgages. I called CCCS of Southern New England a few months back, but they wanted over $300 a month for a payment which we couldn't afford.
A-TEAM KD: To find a reputable credit counseling agency, you would want to visit the National Foundation for Credit Counseling (NFCC) at www.nfcc.org. I work for a local non-profit organization (CCCS of CNY) located right off of Wolf Rd. in Colonie. In a free counseling session, the counselor would go through your income, living expenses and debts to see what options are available to you based on your current financial situation. I would suggest starting with the counseling first to see what you can do first. The counseling session can be done over the phone, too - locally, it's 518-482-2227 or toll free at 1800-479-6026. The counseling sessions are about an hour long so make sure you allow enough time.

CBS 6 VIEWER: I have debt. I would like to fix my credit and need to know the best way to go about doing it.
A-TEAM KD: Ok well what I would suggest doing is starting with a counseling session first with a certified credit counselor. Consumer Credit Counseling Service of CNY is located off of Wolf Rd. in Colonie and will go through your household income, monthly living expenses and household debt.
CBS 6 VIEWER: I have a lot of hospital bills and utility bills and a few credit cards. I was thinking about bankruptcy -- I don't have a lot of money to make high monthly payments, though.
A-TEAM KD: Credit counseling really goes through all the options before bankruptcy. However, bankruptcy is always an option. If you can't make it to the office, the appointment can be done over the phone. Once the appointment is over, the counselor will mail you the information and suggestions that you and him/her talked about.
CBS 6 VIEWER: Okay, and how would I go about getting all the info I need if I already did the free credit report for the year? I was unable to print it out and can't pull it back up.
A-TEAM KD: You can call to schedule an appointment by calling 1800-479-6026 or 518-482-2227 to schedule an appt. The free credit report website is www.AnnualCreditReport.com

CBS 6 VIEWER: I have a credit score of 586. What score will get me the good rates? How can I repair my credit as quickly as possible?
A-TEAM KD: A good credit score is 680 or above. Unfortunately to increase your credit score, it does take time; however, the fastest way to rebuild your score is to pay your debts on time and to pay your balances down.

CBS 6 VIEWER: I have lot of credit card debt and was wondering about Consumer Credit Counseling -- is it a good organization to help you out of debt and does it charge a fee. If you do sign up for help, does this affect your credit score?
A-TEAM KD: Consumer Credit Counseling is a non-profit organization that does not charge for the counseling. CCCS of CNY's website is www.CreditHelpNY.org if you want to do some background check on them. The counseling is free and you are not obligated to use any of the services they offer (besides the free counseling) if you don't want to. Or you can go on www.nfcc.org (National Foundation for Credit Counseling) which is a website that has all accredited and certified agencies. This national outfit sets a very high standard for all of their credit counseling agencies.

CBS 6 VIEWER: I have credit cards that equal about $14,000. I do not spend frivolously, but I have a college student and expenses sometimes that are necessary; I also have a first and second mortgage. How hard will it be to get a loan to pay off the cards at this time?
A-TEAM KD: It really depends on how your credit report/score is looking. When was the last time you saw your credit report with the credit score?
CBS 6 VIEWER: About three weeks ago, it was in the high 600s.
A-TEAM KD: Okay, to get an unsecured loan for that amount will most likely be very difficult. Even before the current economic state, banks are not willing to take the risk to lend without having an asset to tie to the loan. What you may want to consider is sitting down with a certified credit counseling to see what options are available to you with out taking out additional debt. The counseling sessions are free and you aren't obligated to use/enroll in the services they offer.
CBS 6 VIEWER: We are able to make all of our payments but things are getting tight and I worry about how tough it may get if you do credit counseling - won't it ruin your credit?
A-TEAM KD: If you were to enroll in a Debt Management Plan through a credit counseling agency, it may show on your credit report simply as a notation "paying through a third party, paying on a Debt Management Plan." The creditors may or may not report this (it depends on your individual creditors which would be reviewed w/you in your counseling session). This notation would only show on your credit report for the time you are paying that debt off on the plan. After that, the notation will be removed and no one will know that you have gone through this program unless you decide to disclose that to them. And as long as you make your payment on time each month, this will help your credit report because you will be paying down your debts and paying these debts on time.
CBS 6 VIEWER: Okay. Can you combine a loan, too, that was a home improvement loan that is not home equity but has a high interest rate - so basically something to do before your credit gets bad? Would it be hard to get a car loan with that showing on your credit report?
A-TEAM KD: Car loans are different kinds of debt. I don't believe it would be an issue. The loan you are referring to, is this an unsecured loan?
CBS 6 VIEWER: Yes, it was a loan to purchase windows through GE Money Bank; it's a revolving loan.
A-TEAM KD: If the loan is secured to your home, no, this can not be included on the Debt Management Plan. Only unsecured debts (unsecured loans, credit cards, medical bills, etc...). It may not be a secure loan. I would suggest double checking on that. If it's unsecured, yes, it can be included. By the way, the advantages of a Debt Management Plan also, is that the creditors agree to lower the interest rates, waiver overlimit/late fees and they generally accept lower monthly payments as well. The counseling is free but there is a monthly client fee which varies from $10-$30 per month. This is based on the amount of debt you owe which your counselor will review with you in your appointment. The counseling agency does not take your cards however you are not allowed to use credit cards while on the plan. The agency doesn't monitor this however some creditors may.

CBS 6 VIEWER: I am having a problem with a local law firm that has reported me to a credit reporting agency for not paying a bill. I have disputed this, sent proof and even though nothing was resolved, they reported me. Is this normal?
A-TEAM KD: What kind of proof did you send? And where did you send it to?
CBS 6 NEWS: I faxed a copy of the debit made from my credit union. I also called them three times. The first call was not taken care of because the men quit. The second call was when I faxed the proof. In the meantime they reported me. A call to Samaritan Hospital was a waste in the very beginning.
A-TEAM KD: What I would suggest is to get more detailed information regarding your situation and to talk to a certified credit counselor. The counselor would then be able to give you the exact steps you would need to take to resolve this once and for all. Disputing information and debts does take time, unfortunately.

CBS 6 VIEWER: I have an offer in the mail from Bank of American to consolidate. Is it worth it to pay off my credit cards?
A-TEAM KD: It really depends on the offer they are giving you and the balance that you would be transferring.
CBS 6 VIEWER: I have about $15,000 in credit card debt; the offier is $15,000 at 3.24 monthly for 60 months.
A-TEAM KD: By doing that, it may hurt your credit card score because you will be maxing out a brand new credit card. What will the interest and payment be after the 60 months?... You may want to consider talking to a credit counseling agency first. What they would do is review your household income, monthly living expenses and debts. Based on all that information, they will see what options would work best for you.

CBS 6 VIEWER: As far as making extra payments on my credit card debt, what is the best way to pay down credit debt? Which should get more money, the card with lowest balance or the one with the higher APR?
A-TEAM KD: Either way would do. What I like to do is see some progress on the balances going down, so paying the extra payments to the lower balanced cards seems to work great for the clients I see.
CBS 6 VIEWER: Thanks... I can't wait to get rid of them.
A-TEAM KD: I think a lot of people feel the exact same way you do!

CBS 6 VIEWER: I have or had a low-interest rate on my credit card with Citibank. One payment lost in mail -- as soon as they called, I made payment and the check cleared 10 days later. They jumped my rate, and now the case is an "appeal." What are my chances?
A-TEAM KD: Have you been late more than this one time in the last 6 months?
CBS 6 VIEWER: Not in over 15 years.
A-TEAM KD: Ok what I would suggest doing then is calling the credit card company to dispute the interest increase. Ask them to do a "review of your account." Point out to them that you have been a great consumer and you have paid on time for many years. If they aren't willing to reduce your interest rate, you may want to consider talking to a credit counseling agency. These non-profit agencies get the credit card companies to lower the interest rates, waiver over limit or late fees and generally accept lower monthly payments as well.
CBS 6 VIEWER: I don't know if I can trust them. Heard a lot of horror stories.
A-TEAM KD: To find an acreditted agency, you would need to go to www.nfcc.org. This national outfit holds all of their agencies to very high standards so you know they are reputable and trust worthy.

CBS 6 VIEWER: Our new health insurance starting in January includes a $2000 deductible. We recently received cash advance checks from one of our credit cards with a 4.9% rate until 2011 - should I do the cash advance so I won;'t have to worry about the deductible, or just hope I have the money when I need it? (I have small children so I know I will be visiting the doctor!)
A-TEAM KD: I wouldn't suggest using the cash advance for the deductible. You would be committing future income (that you aren't 100% certain will be there) to pay the deductible expense. If you have any room for savings, I would start there. Even if it is a small amount.

CBS 6 VIEWER: My credit was very good (mid 700s) until I cosigned on a car loan with my daughter last year. She never paid on time and it has dropped my score down to the mid 600s. What can I do to fix this?
A-TEAM KD: Co-signing is very risky because you are relying on someone else to pay the bills. If there is any way your daughter can re-finance the loan, that would be in your best interest.
CBS 6 VIEWER: I have the car now and am refinancing it, along with trying to sell it - but is there any way I can call the credit bureaus and explain what happened, and have them maybe fix some of it? Or is it just wait and it will fix itself?? How can I have them take all the credit cards that I used to have over the years so it doesn't look so bad, even though I always paid them on time?
A-TEAM KD: Unfortunately, calling the credit bureaus won't help. For now all you can do is take over the payments and continue to pay your other debts on time. This will help outweigh the negative payments made (or not made rather) on the car.

CBS 6 VIEWER: I inherited some money. Should I pay off credit cards and part of a 401k loan, or all of the loan and part of the credit cards?
A-TEAM KD: It really depends on the interest rates you have with all of the debts. You many want to sit down with a credit counselor to weigh your options first. The counseling is completely confidential. What you talk about with the counselor is between you and your counselor. And its always a good start to talk to someone to see what options are available to you before it gets to the point of not being able to handle the debt at all.