- Examine the features of the Equifax Debt Wise program.
- Learn about the program's debt stacking feature.
- Weigh all debt relief options, before you choose one.
Is the Equifax Debt Wise program a good product?
The Equifax Debt Wise program was recommended to me by a friend. I am trying to get out of debt. I have about $10,000 in credit card debt. Do you think the Equifax Debt Wise program can help me? Do you think it is worth the $14.95 per month it costs?
Thank you for your question about the Equifax Debt Wise program.
The three main credit bureaus, Equifax, Experian, and TransUnion, all offer credit monitoring services. Equifax now offers a service called Debt Wise, which is not like any program offered by the other two bureaus. Debt Wise is a step-by-step plan that aims to help consumers to pay down their debts most efficiently, save money on interest charges, and accelerate the time it takes to become debt free, all without spending more each month.
Debt Wise Program Features
Debt Wise is one of many products offered by Equifax. It costs $14.95 per month. The Debt Wise program has a number of different features. These include:
· The’ Fast Pay Plan Wizard ‘helps you create a plan to pay down your debt. The wizard is easy to use. You can input all your information in as little as 10 minutes
· The ‘Fast Pay Plan’ allows you to choose the debts from your Equifax Credit Report that you want to include and to add debts not in your credit report. It is easy to update and change your plan
· Automatic tracking of your progress in paying down your debt, as new information is reported to your Equifax Credit Report
· ‘Spend Right’ tools to help you stay on track. Spend right tools include worksheets, articles, financial tips, and spending logs
· 4 Equifax Credit Reports along with 4 scores per year including detailed explanations, comparisons with national averages and graphs of how lenders view you
· An interactive FICO credit score simulator that shows you how specific actions that you take will change your FICO credit score
· Daily monitoring of your Equifax Credit Report for key changes. You can receive an email or wireless alert about any changes to your report, such as new inquiries, new accounts, a change of address, name change, changes to existing accounts, new or changes to collection accounts, liens, suits, and judgments
· Up to $25,000 identity theft insurance with no deductible
· Customer Support that is available 24 hours a day 7 days a week
The Debt Wise program allows you to easily import account information from your credit report into the Fast Pay Plan Wizard. It also allows you to include debts that do not appear on your credit report. After you fill in the required information about the debts you want to include in the Debt Wise program, the Wizard figures out the best way for you to pay your various accounts. Debt Wise recommends a strategy that Experian calls ‘debt stacking.’
Debt stacking focuses on paying off one account at a time, while staying current on all of your bills. Once the targeted account is paid off, you target a second account, and so on, until all your accounts are paid off. Debt stacking targets the highest interest debt first. Once the highest interest debt is paid off, every dollar that was being used to pay off that debt is then shifted to the second highest interest debt, in addition to the amount that you were paying for the second card’s required monthly minimum payment. Experian did not come up with a revolutionary idea; debt stacking is another name for ‘debt avalanche.’ Avalanching is very commonly recommended as a debt pay-down strategy. Some people advise you to target the smallest debt you have first, which is called 'debt snowballing.' With snowballing, you get the psychological boost of crossing off one account from your list of debts more rapidly than if you were paying off the highest interest account. While there may be a boost to your spirits from paying off the account with the smallest balance, I recommend the debt avalanche or debt stacking method, because it will get you out of debt fastest. The big psychological boost you will get when ALL of your debt is behind you far outweighs the smaller benefit of paying off a small account sooner, when it is accompanied by the cost of more time and money for you to become debt free.
Debt Wise seems to be an effective way for Equifax to differentiate its product offerings from the two other large credit bureaus. The system seems to be easy to use. The cost is $14.95 a month, which is not exorbitant. The key question is whether or not it is worth the cost. Seeing that the strategy that Debt Wise recommends, debt stacking, is nothing new, you should not sign up for this service because of the knowledge it shares with you. A good reason to sign up is if using the Debt Wise program will force you to stay on top of your finances. Sometimes, paying the small monthly fee can be an incentive to get the most possible out of the service. Unfortunately, given how Americans pay money for diet programs or exercise programs and then do not use them, it is clear that simply paying for the service is not enough to motivate proper behavior.
I recommend that you look at every available option for resolving your debt and compare the pros and cons. Start by reading the Bills.com White Paper about debt relief options.
Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q4 2022 was $16.91 trillion. Auto loan debt was $1.55 trillion and credit card was $0.99 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in Mississippi, 35% have any kind of debt in collections and the median debt in collections is $1598. Medical debt is common and 16% have that in collections. The median medical debt in collections is $719.
To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.
Are you considering spending $180 per year for Debt Wise? Unless you feel that the only way you can motivate yourself to be disciplined about managing your debt, why spend $14.95 per month to be reminded what debts you should pay off first. You can follow the same plan of action that Debt Wise recommends, which is paying off your debts by focusing on the highest interest rate debt first, then moving to the next highest interest debt, until all are paid off, without paying a fee to Equifax.