The Dolans Credit Clinic

Ken: It’s no surprise that things are tough credit wise across America and also no surprise we’re getting literally hundreds and probably thousands of questions relating to credit. So Daria we’re going to roll this one fast. Will you do three or four, instead of doing a separate video for one question? We got so many. Let’s do three or four of them in one video and roll them. Daria: Okay! Ken: I’ll start with— Daria: Kenny! Ken: Yeah! Daria: I know why you picked first. Ken: Kenny “What is the impact of debt consolidation on my score?” Well, bad news I guess is that you may very well reflect in your credit report. So what? Daria: But there’s no impact short term, it’s going to appear on your credit report but you know what, that’s better than having a bankruptcy appear there later or non payment and collection agencies hounding you which will also hit your credit report. At least, if you go a consolidation route, you’re showing that you’re trying to get your debts paid and that’s the most important feature. Ken: And if in fact if the debt consolidation results and you’re paying off your loans on time, bingo, that’s going to help your credit score. Daria: As soon as you get rid of all that access debt you’re going to look a whole lot better. How about Anida? Ken: Anida says, “Hey Dolans, am I responsible for debt under my deceased husbands name (credit cards now) or just those under both names?” Anida a very good question and it’s a little— Daria: It’s yes or no. If there are assets that were joint— Ken: Let’s say credit card balances are in question not just the asset. Daria: I'm going to give her an answer if you would stop interrupting. Thank you. If your husband had a credit card but there was money that you inherited due to his death, that you—you’re his estate must pay those unpaid credit card bills even though you’re not directly responsible on the card you never signed for and had no signatory rights to. Ken: They’re going to—what you are saying is any assets coming through as part of a will they are going to go after. Daria: Absolutely! Ken: Whether they get it or not who knows. Also that’s a good one Daria! I didn’t mean to interrupt you that’s a good point. Daria: If he died broke and you’re on a limited budget and there was nothing to pass on then no you wouldn’t be responsible for it. Ken: However, even though your name Anida may not be on the credit card on you know and neither Jones and maybe it was Joe Jones but you had signatory rights, which means you could use it. You’re name was not on it, but your husband had granted you ability to use it you may very well be responsible for that credit card. If you are talking about much money I would sit down and talk with an attorney. Daria: Absolutely! Ken: Okay. Daria: Denise has a question. Ken: As Denise says, “At my request, I asked the credit card company to lower the payment and the interest. Well the lender said my credit would reflect the fact on my credit report, when they did that, that it would be a financial hardship program that allowed me to get a lower payment with lower interest. Well that affect my credit score and is that better or worse than a missed payment?” That’s a good question. Daria: It’s a great question a little difficult to ask because if you were just merely trying to negotiate figuring “I've got the money but I don’t want to pay this extraordinarily high rate etcetera,” then it’s not a financial hardship program and I would not agree to the terms. I would continue to make the payments at the higher rate until you can transfer somewhere else. But with that said, you may have asked because you are in financial extremis and the fact of the matter is if they put you in a financial hardship program they’re going to report that on your credit report. Ken: It’s better than a bankruptcy Denise period. Get help. Bad news, bad informations stays in your credit report for 6 years admittedly it’s better than a bankruptcy. Mel says, “Hey Dolans! I've got several cards and I haven’t used them for a long time. Now the company wants to close them down for non-use. They want to close them down because they’re tired of sending some statements. Should I allow this to happen or should I take more offensive action and close them myself?” Daria: Here’s the problem Mel, you will affect your credit report with bad news or a lowering of your Fico score for sure if those accounts are closed whether you choose to do it or the issuer chooses to do it. If there are long term accounts, any time you close a long term account it negatively affects. Believe it or not, negatively affects your credit score. Ken: But if you want to close any credit card long or short we’re going to put a website we’re going to put a URL up here an address here at dolans.com a Dolan credit cancellation letter use that one. That’s the way to do it Mel. Keep your credit questions coming. I know they’re not going to stop for a while, we’re glad you joined us here on dolans.com.