Usually this payment is lower than current minimum payments and it is always within your financial ability to pay. When Federated Financial pays your creditors, it is almost always at a lower interest rate so that your payments actually go toward reducing your debt. Only your creditors can report your actions to the credit bureaus. Creditor participation in our program and financial support of our operations are strong indicators that such a program will not harm your credit. By reducing debt and having the creditors report the payments received as prompt payments, most people who enter into a consolidation plan will actually improve their credit rating.
Some creditors do report participation in a debt consolidation program to credit reporting agencies.
You should keep in mind that such reporting has many positive elements. Participants in debt payment programs cannot go further in debt. In addition, debt plan participants are paying creditors according to the creditors terms and conditions. Federated Financial works directly with these types of creditors on an ongoing basis. We contact them immediately and are usually successful in negotiating better terms, lower payments and rates.