Credit 9 provides debt consolidation products that help people get out of debt. They offer lower rates than what the typical credit card delivers, providing terms that last for a few years instead of creating a long-term obligation.
When you pay off your credit cards with Credit 9 products, you can boost your credit score. The agreement creates a single fixed and affordable monthly payment if you don’t acquire new lines of credit or use your existing ones.
There are never any application or prepayment fees associated with your Credit 9 account. If you want to double up those monthly payments, you can get out of debt quickly.
Is Credit 9 a legitimate company? Do people save money when working with this agency?
Has Anyone Heard of Credit 9?
Credit 9 is a debt consolidation loan provider affiliated with Americor Funding, which is a debt resolution company. The structure of this lending product requires the agency to pay the creditors an individual owes or finance debt to 30 years for a low monthly minimum to reduce a person’s DTI.
The goal of Credit 9 products is to help consumers get out of debt. How they do that depends on the individual’s unique situation and their ability to stay consistent with the consolidation plan developed for their finances.
David Norris currently leads Americor Funding, which was founded in 2015. The company provides debt solutions to people and families across the United States. They have a proprietary platform that helps clients get out of debt quickly to achieve a more profitable lifestyle.
In 2020, Americor Funding ranked 24th in the Inc. 5000 ratings. For 2021, they dropped to #533.
Most debt consolidation companies operate the same way. What makes Credit 9 different is that you get into the Americor program or use a loan with it to develop a strategy that brings you back to the other side of the ledger.
When applying for debt consolidation relief, you’ll be providing the lender with information about your current obligations. In return, they’ll offer a side-by-side comparison that shows the possibilities for your finances when joining their resolution program.
You’ll get to see how much you’d pay under your current plan, what is available through Americor, and then what you get when Americor and Credit 9. If you choose the latter, the initial debt has a faster payoff time, but you also get a three-year loan (or longer) to pay back the negotiated settlement.
Should I Use Debt Consolidation Services Like Credit 9?
Here’s the reality of what a Credit 9 offer provides. The scenario is for someone who currently owes about $25,000.
Your current payment for credit cards would be approximately $500 per month with a 24% APR or higher. If you only paid the minimum amount each month, it would take about 30 years to get out of debt, assuming that you didn’t miss payments or add new credit lines to your account.
That means you’d pay approximately $55,000 in interest.
If you work with Americor Funding, they can negotiate with your creditors to create a different payoff scenario. That might include them paying a settlement amount, and then you start paying the monthly payments to the agency.
The agency might want you to send the monthly payments to them, and then they’ll distribute them to the creditors.
Most people can get out of debt in three to five years in that situation with stable income and no new creditors to manage.
If you use a Credit 9 product, the payoff happens in a year. The difference is that you have a debt consolidation item on your credit report, creating a new loan that you’ll need to pay off before acquiring new debt.
With a $25,000 obligation, the average person would pay a little over $5,000 in interest on a 37-month loan.
That means you’d pay approximately 10% of the expected interest payments from your credit card in 30 years over a three-year period with Cloud 9. It helps you get out of debt faster, but you’re actually paying a higher overall rate to achieve that outcome.
If you fail to make payments, the account could be sent to collections. That means you’d have even more problems with your credit report, dropping your score further.
Is Credit 9 a Legit Company?
Credit 9 was founded in 2013. It is a direct lender that provides loan products to consumers in all 50 states.
The issue to consider is your current financial situation vs. your future one. If you have a lot of debt now, but you know that money is coming your way in a year, the 12-month 0% offer that Credit 9 provides can help you save significantly.
Another component of a Credit 9 offer is the “added payment” section under the qualification amount. Many people see that they can get an extra $10,000 or more, which feels like free cash to use for almost anything.
The average interest rate for personal loans through Credit 9 is about 15%. That’s more than what some people pay on their credit cards, and triple the rate of many vehicle loans.
Although you can consolidate high-interest debt at a lower overall APR in some circumstances, the fact remains that high-risk customers pay a lot for lending products.
If you’re in a subprime space and need cash, Credit 9 seems like an open door. When you see the origination fees and other costs of processing your loan, you’ll find that there is less money available to put toward your debt.
There is a time and place where debt consolidation makes sense. If you have a credit card that offers 0% balance transfers for three years or more, you might save more by going with that option instead of using a Credit 9 product.
What Are the Pros and Cons of Debt Consolidation?
Service providers like Credit 9 deliver debt consolidation products that make it easier to manage personal obligations to different accounts.
Imagine that you have a car, home, boat, and credit card payment to make each month. A debt consolidation product would lump the outstanding balances into one obligation with a lower minimum amount due than the other items combined.
That makes it easier to manage debt payments, but it also creates opportunities to take on more debt. Since you’re paying less, the temptation is to spend more.
Because of the different advantages and disadvantages that debt consolidation offers to each of us, it’s important to review the positives and negatives carefully before proceeding.
| List of the Pros of Debt Consolidation | List of the Cons of Debt Consolidation |
| You could receive a lower interest rate for the debt consolidation product than what you currently pay for credit cards and other loans. | Some people don’t qualify for a lower interest rate when consolidating their obligations. The application even has the possibility of being denied because the individual’s credit score is too low. |
| Instead of dealing with multiple payments and statements, you’ll receive one bill for everything if you’re approved for debt consolidation products. That means it takes less time to get through your monthly obligations. | Missing payments with a debt consolidation product can make things worse for a person’s credit score. The terms and conditions of the lender’s offer might include an automatic balloon payment for everything in this situation. |
| Some people can get out of debt faster with consolidation because third-party negotiators can reduce the total amount due. This action closes the account, but creates a payoff scenario that can have instant credit score benefits. | Many lenders create lower monthly payments by extending the terms of the loan to 30 years, just like a mortgage. That means the costs can be considerable when looking at the interest payments. It often costs much less to pay everything off at once. |
| It provides a way to reduce a person’s debt-to-income ratio while creating opportunities to build an emergency savings account. By saving money, there are opportunities to begin investing for net worth gains. | Debt consolidation doesn’t address the root issues that created the initial obligations. Without forming new spending habits, many people end up owing more than they originally did with these efforts. |
The most significant advantage of a debt consolidation offer is that you can pay creditors at a lower interest rate while possibly cutting the total amount by 50% or more.
Imagine that your credit cards have a combined $20,000 in debt with an APR of 30%. If you got a debt consolidation product with a guaranteed repayment term, you could reduce your monthly minimum payment and save thousands in interest costs.
The disadvantage is that the loans for poor-credit applicants, often defined as someone with a FICO credit score of 629 or lower, might not have an advantageous rate. Another debt payoff strategy, such as the avalanche or snowball methods, could work better.
Is It Worth Working with a Debt Consolidation Company?
The issue with Credit 9 and other similar programs is that they often attempt to put consumers into programs with strict terms and conditions. A common problem is to call a loan if a customer applies for new credit or have it sent to collections without paying off the current obligations.
When I was in college, I started working with a debt relief agency because by debt-to-income ratio was nearly out of control. I was working part-time, attending classes full-time, and trying to pay my tuition, rent, utilities, and a credit card while earning $7.50 an hour.
There were some days when I’d put in a long shift at work, drop off my gear at home, and run straight to my first class of the day. My professor scolded me more than once for eating Pop-Tarts in the front as I was trying to get some breakfast.
I approached the debt consolidation program to try to get things under control.
The terms seemed reasonable. They’d negotiate with my creditors, get a new rate, and pay off the settlement. I’d pay them a monthly rate.
What eventually stopped me from that process was that my credit report would show all my accounts as “settled” instead of “paid in full.” I was told to expect a 100-point drop or more in my credit score.
If your credit is in the 650 range, I’d recommend looking for ways to manage your debt without third-party assistance. Call each company, speak with a representative, and see what options are available.
When debt seems overwhelming, contact a company like Credit 9 to see if their services are worth considering.
