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Debt management


mikeg
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During 2002, I went through a debt manager (not knowing any better at the time) and have made every payment since then on time. My credit reports are showing each one of the accounts (there were four) with no lates since 2002. However, under the comments it says "account closed by credit grantor, account managed by debt manager". I plan on paying off the entire $5K remaining on this this year.

My question is this: Are these comments bringing down my score? And when I do pay it off, does anyone have any experience with these things to know if the CC will allow the account to become active again? They are now showing a long history (all were activated in 1998) which I think should help my scores. I still get the monthly statements from each of the accounts showing the payments that were applied, balance, minimum payment, etc.

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I'm not sure what the correct answers are but i will tell you what I know from personal experience. The comment section might not be hurting your score I say this because I paid Citi through a DMP program last year. they removed the comment about the credit counseling . My score did not increase. I disputed the "closed by credit grantor" since I voluntarily entered counseling effectively choosing to close the account it now states closed by consumer but again no point increase. As for reopening I had no desire to do that my accounts were old from 1991 went into CCCS in 2001 I am still paying MBNA and I won't request that one be reactivated either. You can always just call the creditor and ask them if they will reopen or lift the account suspension.

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If those remarks are on your report when you apply for a mortgage they will cause a 1/2 point to be added to your interest rate. They are considered like a BK in that industry.

Another drawn back of a DMP and/or CCCS type program is that they are considered right next to bankruptcy which is pretty serious.

Also majority of the DMP and/or CCCS type programs require you to close out all of your credit cards (because your not able to manage them per say) which has a very negative effect on your credit score. It wouldn't be so bad if you could keep 2 credit cards open and close the rest because once your out of a program as such. It is very hard to rebuild your credit by getting approved without putting up money. Although it is possible...

God Bless,

Brad

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Brad,

I was able to keep some cards open and only enroll some in CCCS. I told them I needed them for work. I was also able to get a car loan a year after enrollment not the greatest terms but again it was due to a job change. So while it may be difficult like BK it is certainly achievable. I have been in CCCS for 4 years and in the last 1.5 years alone I have added another car(joint with DH due to his car finally dying) and 3 more credit cards- not with the companies in cccs. Though I know MBNA is aware of all this since in Nov I renegotiated interest from 15.9 down to 7 and bypassed cccs even though I am still in the program.I just negotiated better then their counselors.I don't know if the cards MBNA or Citi will ever deal with me again but there are plenty of cards out there and personally I only use mine for business or if I plan on paying the personal balance within 3 mos- if I can't pay a balance within 3 mos I simply won't purchase the item until I can.

I think the bottom line is fixing my credit is something that will require time and patience. I screwed up but I am now committed to not doing so again. If I have to put up with some lousy terms that's the consequence I have to face for my irresponsible behavior- but it has gotten better and I'm sure it will get better for the OP once he is out of the DMP he can easily dispute the comments since they will no longer be in a management program.

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most credit card companies will not re-open the accounts once they have been closed by creditor. i work for a credit card company, in collections, and usually the companies should inform you of that, once you have informed them of joining cccs. there are two different types of closure, if the credit grantor has closed the account, normallly it cannot be re-opened, especially after being w/ cccs. that shows them you were having difficulty w/ the account. if the credit is just revoked, however, there is usually the opportunity to re-open. depending on the company.

the remark does not hurt your score, however it may be frowned upon by companies, when trying to re-establish new credit. the more positive thing is that you are paying and current with the account!! yeah!! that is one of the most important things to your credit. and when you pay it off, that will put a major boost on your credit score, and will look very good to future credit grantors. keep a close eye on your statements and make sure cccs is paying your accounts in a timely manor, and your credit grantors are recieving the payments before your due dates and you should be good to go!

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Brad,

I was able to keep some cards open and only enroll some in CCCS. I told them I needed them for work. I was also able to get a car loan a year after enrollment not the greatest terms but again it was due to a job change. So while it may be difficult like BK it is certainly achievable.

What was your interest rate on the car?

99% of interest rates on car loans are based on credit scores not job status.

God Bless,

Brad

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Thanks for your responses on this. I couldn't be happier that I found this forum. I screwed up for six months and it has been killing me for 3 1/2 years. I was able to keep one of my cards (Discover) and I am current on this card with no lates. I am hoping that I can use that to build on.

Once I pay the cards off, even if I can't reopen the accounts, what are the chances that I can get the comments off but leave the account history on the reports? I would imagine that 4-5 years of on time payments would be helpful. At that point would you suggest a goodwill letter?

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My comments with citi disappeared on their own. MBNA never put on comments alluding to any special program. My history is intact for all accounts. citi got rid of lates from 4 years ago MBNA shows the 120 day lates from 4 years ago (5/2001) and perfect history ever since I joined the program.

You can try the goodwill letter to get rid of the old lates and to make sure the comments go away but you may not even need it.

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