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Debt consolidation advice for Security Clearance

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  • Debt consolidation advice for Security Clearance

    Does anyone know of a good, reputable debt consolidation company? The thing with debt consolidation is that it doesn't mark your individual creditors as being in a payment arrangement on your credit report. Will just having a payment arrangement with a debt consolidation company satisfy the credit part of the security clearance?
    Last edited by robinpugs06; July 18th, 2012, 06:15 PM.

  • #2
    Re: Lots of weight to lose

    Give me until tomorrow and I'll ask the Clearance Security Manager about it. I'm not familiar with what litmus test is used to determine suitability for a secret clearance. Interestingly, I JUST finished filling out my SF86 (online), as my 10 years expired and I need to renew it...What a pain in the a$$ that is! Man! I feel your pain.

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    • #3
      Re: Lots of weight to lose

      Thanks Mongoose. My ANG recruiter is double checking the age limit and trying to find out if using a debt consolidation company will work. I have no criminal record, not even a speeding ticket, I have a college degree, more then half the credits toward my master's degree... just crappy credit from a few years of bad luck and lay offs!
      Last edited by robinpugs06; July 18th, 2012, 11:15 PM.

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      • #4
        Re: Lots of weight to lose

        Ok so I have been told that using a debt consolidation company will look good for my security clearance. Has anyone used one and know of a reputable one? I don't want to get scammed as I know there are many out there that are bs...

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        • #5
          Debt Consolidation Company and Security Clearance

          Ok so I have been told that using a debt consolidation company will look good for my security clearance. Has anyone used one and know of a reputable one? I don't want to get scammed as I know there are many out there that are bs...

          Comment


          • #6
            Re: Lots of weight to lose

            Originally posted by robinpugs06 View Post
            Ok so I have been told that using a debt consolidation company will look good for my security clearance. Has anyone used one and know of a reputable one? I don't want to get scammed as I know there are many out there that are bs...
            This sounds like something you'll have to do some research on to find a company that fits your needs. I don't have any specific information on consolidation companies, but perhaps start with Angie's List?

            Also, you don't need to post this question multiple times. Others can still read and respond to your question above.

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            • #7
              Re: Lots of weight to lose

              Originally posted by robinpugs06 View Post
              Thanks Mongoose. My ANG recruiter is double checking the age limit and trying to find out if using a debt consolidation company will work. I have no criminal record, not even a speeding ticket, I have a college degree, more then half the credits toward my master's degree... just crappy credit from a few years of bad luck and lay offs!
              It won't be the fastest approach to cleaning it up, but pull your reports and start disputing the negative accounts.

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              • #8
                Re: Debt Consolidation Company and Security Clearance

                Originally posted by robinpugs06 View Post
                Ok so I have been told that using a debt consolidation company will look good for my security clearance. Has anyone used one and know of a reputable one? I don't want to get scammed as I know there are many out there that are bs...
                For a security clearance, I can't really answer that, I would assume that it won't make any difference because there really is no record of use on your credit report, however they may see it as an attempt to be financially responsible which could impact your recruiting process... perhaps someone with a better understanding of the recruitment side of this can answer more accurately.

                As far as getting scammed, I wouldn't say that you are likely to be scammed from the use a consolidation company, more like getting ripped off. Basically what a consolidation company (from what I have seen, I had my own credit repair business in Texas) does is collect the information of your current debts and stores them in your file. They will then fax or mail a letter to the creditor company to show that you are giving the consolidation company the authority to make changes to your account with the creditor. They can then attempt to achieve lower monthly payments and consolidate all of the payments into one large monthly payment. This makes it easier for the debtor (you) to manage their (your) finances. The consolidation company then pays the bills on their due dates and in return this reflects with a promising payment history on your credit report... so that is the basis of how they work... Now for why it is a ripoff. It is in the consolidation companies best interest to get the smallest payment required monthly for all of your debts, the reasoning is pretty simple, the lower the payment, the longer it takes to pay off the debt, which in return means longer business from you. The consolidation company then charges you a monthly cost, which is added into your one large payment. So if your monthly debts added up to 1500 you may be paying 1650 or something, this not only gives them an extra 150 a month in their pocket, but because they are making minimum payments it could ensure that they receive this money for many years. This could end up costing you thousands more in not only the consolidation companies fees but also in the creditors monthly interest.

                My suggestion is to stay away from consolidation companies and to take it upon yourself to make a monthly budget, see what you can afford, sit down one afternoon, and make the phone calls to the creditors. See about lowering your monthly payments to fit into your budget... they want your money, they WILL work with you, even if it's only $15 a month. This way you are at least saving that money that you would just be throwing away to a consolidation company for something you can easily do on your own. Just my .02

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                • #9
                  Re: Lots of weight to lose

                  I would avoid it and just work out a plan yourself. If there are so many scams out there, one it would think its an industry to try and avoid.

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                  • #10
                    Re: Lots of weight to lose

                    Originally posted by ParalegalNCO1 View Post
                    It won't be the fastest approach to cleaning it up, but pull your reports and start disputing the negative accounts.
                    I don't know what type of timeline you are on to try an enlist, but disputing the accounts is free. It is up to the credit bureau to verify these items pursuant to federal law. Sending a simple letter reading verbatum.."Item Very Request" with the specific account information puts it on the credit reporting agencies to verify the account within 90 days. Many times they are unable to, and then have no choice but to delete it.

                    People frequently attempt to dispute items with lenthgy explanations which works against your favor. One they have enough info to confirm its yours, its not going anywhere. People frequently give them that info in their very own dispute letter.

                    "Item verify request"...all you need, it works more times then not.

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                    • #11
                      Re: Lots of weight to lose

                      Originally posted by ParalegalNCO1 View Post
                      I don't know what type of timeline you are on to try an enlist, but disputing the accounts is free. It is up to the credit bureau to verify these items pursuant to federal law. Sending a simple letter reading verbatum.."Item Very Request" with the specific account information puts it on the credit reporting agencies to verify the account within 90 days. Many times they are unable to, and then have no choice but to delete it.

                      People frequently attempt to dispute items with lenthgy explanations which works against your favor. One they have enough info to confirm its yours, its not going anywhere. People frequently give them that info in their very own dispute letter.

                      "Item verify request"...all you need, it works more times then not.

                      +1 on this!!

                      If you are going to tackle credit repair on your own be VERY careful with your wording. There are A LOT of tactics for credit repair also, for a good example check out what a 1-2-punch is. Just please please please be careful with your dispute letters, especially if it is a debt collector. They have specific rules that need to be followed and they WILL send you letters from attorney's claiming that they only need this and that blah blah blah, they will LIE to you. Half the time they DO NOT have what they need and if you stand your ground and threaten with letters to the attorney general they will back down and submit. Just play it safe, every single letter you send make sure to send certified with return receipt too!

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                      • #12
                        Re: Lots of weight to lose

                        Originally posted by RyCass View Post
                        This sounds like something you'll have to do some research on to find a company that fits your needs. I don't have any specific information on consolidation companies, but perhaps start with Angie's List?

                        Also, you don't need to post this question multiple times. Others can still read and respond to your question above.
                        I didn' post the question in this section twice. I had posted it under my health and fitness topic on my weight loss as it led from that topic then realized it would be better suited in this section then you moved my question from the health and fitness area to here so it duplicated it. Sorry about that. I just figured I would have a better response in this section rather then hyjacking my own thread in health and fitness.

                        Anyway, thank you all for the great advice. The problem I am running into is with some of my accounts being charrged off or sold to collections companies, I am having a hard time getting them to accept small payment arrangements. They want me to pay it off in a couple of payments or settle for a lower amount and pay that in full- neither of which is financially possible for me to do right now.

                        Comment


                        • #13
                          Re: Lots of weight to lose

                          Ok, so are you joining the Army or Air National Guard. You mentioned you were still losing weight to join so now you have financial issues for a clearance? Are you running against the age clock?

                          Stay away from debt consolidation companies. Simply pull your credit report. Find out what accounts are delinquent, for how long and for how much. If some are near the 7 year time line; do not contact them. They will be removed when at the 7 years. By you contact them; you are resetting the clock.

                          If they are nowhere near the 7 years delinquent; then call them up and discuss to make payment arrangements. For example, you did not pay 500 dollars for a cable debt and now it is at a collections company for that amount. Call the company up and say you can pay it off for 250 since you do not have a job. They will probably settle for that. Ensure you get a letter that your debt is paid off and that it gets updated in your credit report. It will show up still as negative but at least paid.

                          Any questions, let me know. I had marginal credit back in the 90s, car repos, etc. I know have AMEX VIP and Discover cards since 2001. No credit card debt. Got a VA loan easily.

                          Once you know how credit works and you take responsible action for it; you should never have these problems again. And to be honest, it is a shame if you are in your 30s and not paying your bills and being on top of them at least.

                          Comment


                          • #14
                            Re: Lots of weight to lose

                            Originally posted by robinpugs06 View Post
                            I didn' post the question in this section twice. I had posted it under my health and fitness topic on my weight loss as it led from that topic then realized it would be better suited in this section then you moved my question from the health and fitness area to here so it duplicated it. Sorry about that. I just figured I would have a better response in this section rather then hyjacking my own thread in health and fitness.

                            Anyway, thank you all for the great advice. The problem I am running into is with some of my accounts being charrged off or sold to collections companies, I am having a hard time getting them to accept small payment arrangements. They want me to pay it off in a couple of payments or settle for a lower amount and pay that in full- neither of which is financially possible for me to do right now.
                            Dont speak to them on the phone, ever. Your best friend right now is dispute letters and pay for deletion letters. These companies buy debt for pennies on the dollar. They are in it for Lump sum profit, payment plans do not help them because the average person doesn't benefit by paying anything. Outside of trying to make good on your debts for security clearance stuff, paying your charged off debt doesnt improve your credit, it makes it worse when it comes to your actual score.

                            Research debt settlement, pay for deletion, and dispute...letters.

                            Comment


                            • #15
                              Re: Lots of weight to lose

                              Originally posted by fmcityslicker View Post
                              Ok, so are you joining the Army or Air National Guard. You mentioned you were still losing weight to join so now you have financial issues for a clearance? Are you running against the age clock?

                              Stay away from debt consolidation companies. Simply pull your credit report. Find out what accounts are delinquent, for how long and for how much. If some are near the 7 year time line; do not contact them. They will be removed when at the 7 years. By you contact them; you are resetting the clock.

                              If they are nowhere near the 7 years delinquent; then call them up and discuss to make payment arrangements. For example, you did not pay 500 dollars for a cable debt and now it is at a collections company for that amount. Call the company up and say you can pay it off for 250 since you do not have a job. They will probably settle for that. Ensure you get a letter that your debt is paid off and that it gets updated in your credit report. It will show up still as negative but at least paid.

                              Any questions, let me know. I had marginal credit back in the 90s, car repos, etc. I know have AMEX VIP and Discover cards since 2001. No credit card debt. Got a VA loan easily.

                              Once you know how credit works and you take responsible action for it; you should never have these problems again. And to be honest, it is a shame if you are in your 30s and not paying your bills and being on top of them at least.
                              The statute of limitations is actually 7.5 years. Frequently, even after that you have to dispute it to get it to fall off. They will never delete anything out of their good heart.

                              It is a myth that is resets the clock. The clock starts from the first time the account went delinquent WITHOUT becoming current again. They will send a "reported date" update, but if you pull a report directly from the credit agencies it also has a category of "first reported delinquency", which is also the clock start date.

                              If you ever try to negotiate on the phone, you have a 99% chance of giving them the info to own the debt. Don't own it, dispute it. Paying it DOES NOT RAISE YOUR SCORE...so there is nothing better then deletion.

                              Only in the security clearance world does not oweing anything with a lower score become greater then a higher score with charges offs.
                              Last edited by ParalegalNCO1; July 20th, 2012, 01:19 AM.

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