(PRWEB) October 30, 2012
Many consumers that are overloaded with high interest credit card debt are current on their accounts and still have good credit scores. Although their scores are still relatively good, the fact that they are carrying balances over 30% of their credit limit keeps their scores from rising to where they would be considered “low risk” or “excellent credit”. When these accounts have high interest rates it is very difficult to bring down the balances in any reasonable period of time. Enrolling in a properly administered debt management program can drastically reduce the time it takes to pay these balances down but choosing the right firm is crucial, and choosing the wrong firm can drop their scores even further.
In a “specialized” debt management program that caters to consumers with good credit, steps have to be taken to ensure that further credit damage does not occur as a result of the program. These steps include timing of the first program payment to properly coincide with multiple accounts, the proper closing of the accounts, which accounts are included, small differences between the regular minimum payment requirements and the program payment and addressing possible due date changes if necessary. Here are some tips on what additional steps need to be taken to keep accounts current and make the transition from direct payments to creditors and payments through the debt management program.
Tip #1. PROPER CLOSING OF ACCOUNTS
When proposals are submitting by a debt management agency and accepted the accounts will be closed and if they were not closed prior to submission the accounts will be noted on the credit report as “closed by credit grantor”. Before proposals are submitted it is best for consumers to call and close the accounts they are including in the program so the accounts will show as “closed by consumer”.
Tip #2. WHICH ACCOUNTS ARE INCLUDED
Until 1999 if an account was reported as being in a credit counseling or debt management program it dropped the consumers credit score. Since 1999 this is no longer the case. However there are several creditors that report accounts included in a debt management program as in “collections” which will definitely drop the consumer’s score. Be sure that the firm that you chose knows which creditors these are and advises you to exclude them from your program if you are concerned about your credit score. There are only a few creditors left that do this and the firm should be aware of who they are.
Tip #3. ADDRESSING SMALL DIFFERENCES BETWEEN PAYMENT REQUIREMENTS
When a consumer has an account with an interest rate of 24.9% for example their minimum required payment will usually be higher than the program payment. Depending on when the account cycles in the first month after acceptance there may be a past due amount that carries forward to the next billing cycle. It is extremely important to get these small past due amounts paid so they don’t get reported to the credit bureaus. This has to be monitored on the statements because once the accounts are accepted on the program the creditors will not charge a late charge or call to collect the past due amount but these amounts can still be reported.
Tip #4. DUE DATE CHANGES
The major creditors no longer allow debt management agencies to change due dates. However creditors allow customers to change their due dates once a year as long as they are current on their accounts. When a consumer enrolls in a debt management program they will be choosing a due date with the agency and the agency will be disbursing payments from their single payment to multiple accounts that may have many different due dates. It is very important to change due dates on multiple accounts to properly coincide with one payment to the agency. So for example, if the debt management client chose a due date with the agency of the 15th for each month, changing all due dates for the accounts to the 25th would ensure that all payments disbursed by the agency arrived before the due dates.
For more information on specialized debt management visit http://www.debtsynergy.com
Visit The Accelerated Debt Management BBB Report at http://www.bbb.org/south-east-florida/business-reviews/debt-relief-services-/accelerated-debt-consolidation-26001690#sealclick