Q: What triggered you to address your unpaid debt and credit status?
A: I started to receive letters in the mail from Collection Agencies and credit card companies like Capitol One stating that I owed money and I would be sued and garnished if I did not make efforts to pay the debt.
Q: What kind of debt did you have? What was your credit score?
A: When I first started, my Credit Score was a 580. I was piling on credit card debt, medical bills and old collection accounts I had been ignoring.
Q: What made you seek help from a credit counseling service?
A: The fear of being garnished. I already did not think it was in my budget for me to pay back any of my debts and the thought of losing more money was enough.
Q: What Actions did you take personally to prepare you for entering into a Consolidation with your debts? How did you find an agency to help you, and why did you feel that was a safer route?
A: A few friends of mine who were already enrolled into Debt Management Programs referred me to a Credit Counseling agency. After doing my own research online I was able to talk to an agent. We did a thorough budget analysis that showed me how I could afford to enroll into the program and pay back my debts. We used AnnualCredit.com to look through my credit report and find all of the debts I had. Once it was clear that I could afford to fit this into my budget I felt this was a safe route.
Q: Explain your experience in the DMP. What did you learn while you were going through the program? How did your behavior change financially while you were enrolled in the DMP? Were there any extra habits you broke to help build your credit while you were paying off your older Debts?
A: The budget analysis was very important in the beginning because it showed my where I was spending extra money when I did not need to. When I started out, money was always tight. The time I spent in the DMP was the first time I ever had to stick to a budget. In order to save a lot more, going out to eat was immediately cut out. Initially, only the creditors who were threatening to come after me were added into a debt consolidation. After time had passed and the balances became lower, my other accounts were added in until I had everything completely paid off.
Q: Now that you have gone through with a DMP and successfully completed the program, what type of changes to your financial life do you see? What is your Credit Score like now and what actions are you currently taking to be able to maintain your positive score increase?
A: When I began working on my credit score it was a 580. Today, I am looking at a score of 798! By sticking to on-time payments and a budget, I was able to keep my $500 Secured Card at a low balance and after a few months I received a Discover Card at 18% that I use for gas and groceries.
Q: Would you recommend DMPs to your friends and colleagues? What did you take away from the program that you did not expect initially when you enrolled into the program?
A: I currently do have friends who are enrolled in DMPs. My advise to them was to first make your budget so that you can see where your money goes. When I began Debt management I did not expect the impact on budgeting nor did I understand how your credit actually works. Now that my score has increased to a 798 I’m planning on buying myself a new car!