Debt Consolidation Information

i have a low credit score of 533, and i desperately need to start working on raising it. i have many negative charges on my credit, but not one is a credit card – i don't have any credit cards. most of the stuff is related to hospital visits i made while uninsured–ambulance rides, hospital bills, laboratory tests, etc. that have been sent to collections for nonpayment. i had been told years ago that medical debt doesn't negatively affect your credit as badly as some other things (like loans or credit cards) but that is definitely NOT the case! are there any services out there that help with medical debt, specifically? i have asked a question about debt consolidation in general, but every site i was given is a cheapy ad site with no good information, or at least no info that i didn't already have. if i pursue debt consolidation as an option–knowing that might negatively affect my credit in itself, but it can't get much worse–where can i REALLY go to get info on a good service?

Medical collections/bills are one of the top reasons as to why people file bankruptcy. This is definitely an option if your medical bills are extremely high and you simply don't make enough to pay them off.

Another option is for you to contact the creditors individually and have them agree to settle on balances that are less than full. The downside to this is that you will most likely need to pay the entire settlement amount in one lump sum payment. You could also contact the medical collections and work out a payment plan with them to make monthly payments. Two tips though: Make sure you get any settlement agreements in writing before paying it off and make sure they agree to report the accounts to the credit bureaus as paid in full (get that in writing too). Too often collection agencies will not report the debt has been paid off.

The thing with credit consolidation companies is that many of them have pre-arranged agreements with the credit card companies and not with collection agencies. They will be able to basically set up the same payment plan with the collection agencies that you would be able to, but you will probably end up paying a consolidation company even more because you will have to pay their fees too. The advantage is that you would probably only make one monthly payment to the credit consolidation company versus making several payments on your own to each collection company.

See the credit blog below for more information on improving your credit.

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