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Trinity Debt Management Was Recommended at a Church Meeting. Are They Legit? – Theresa

“Dear Steve,

My cousin has a credit card with Best Buy, it has a very high interest rate and she wants to lower it. She has gone to one of her church meetings and this company (Trinity Debt Management ) was recommended to her. Is this a reliable business? It seems to me that they charge her a fee of no more than fify dollars a month extra on top of the one hundred twenty six they’re using for a payment. Is this normal to charge that amount? I checked with the better buisness bureau and TDM is not registered. I can find no other information About them. Can you help?

Theresa”

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The Answer

Dear Theresa,

Entering into a program with Trinity Debt Management to put the card into a debt management plan, like with any credit counselor, has consequences. Most importantly the account will be closed and will not longer help your cousin to build good credit. The length of the credit history makes up 35 percent of your credit score. If what your cousin is looking for is just a lower rate, she should first pickup the phone and call the lender to inquire about what lower rates might be available. If she just wants a lower overall rate but wants to maintain or possibly improve her credit then she should look at a debt consolidation loan instead.

I would encourage your cousin to use this guide to checkout the company to due her due diligence on Trinity Debt Management. See The Ultimate Consumer Guide to Checking Out a Debt Relief Company Before You Sign On the Line.

But I went a took a look at Trinity Debt Management to See what I could quickly find.

Interestingly it appears Trinity Debt Management has two websites. One is at trinitycredit.org and the other at mydebthasmedown.com. According to the second site, Trinity Debt Management is actually Trinity Credit Counseling, Inc and says they are located at 500 N. Calvert St. Rm 402. Baltimore, MD 21202. But interestingly enough the State of Maryland Department of Assessments & Taxation has no business registered in Maryland under that name. – Source

Trinity Debt Management Was Recommended at a Church Meeting. Are They Legit?   Theresa

But it appears Trinity Credit Counseling is actually an Ohio non-profit corporation that states it is located at 11229 Reading Road, Cincinnati, Ohio 45241. They were previously known as Mid-America Credit Counseling, Inc as well. They do have a registration in Ohio to operate under the name Trinity Debt Management. – Source

My first observation after visiting what appears to be the primary Trinity Debt Management site at trinitycredit.org is that they appear to be primarily pushing a debt management plan as the primary solution.

Trinity Debt Management Was Recommended at a Church Meeting. Are They Legit?   Theresa

Trinity Debt Management does provide information on alternatives for dealing with the debt, such as debt settlement, unsecured debt consolidation loans, and/or bankruptcy. And while the information they present is more balanced and fair than most debt relief sites, I can’t help but get the impression the focus on the site is to drive people towards a debt management plan where the company receives compensation from creditors and consumers.

For example, the debt options page on the debt management plan is not all that fair and balanced. It glows about the debt management plan but makes no mention of the consequences and cons of the program. And there can be a number of them. The statement I found most interesting was their claim it helps the credit.

A third benefit offered through a DMP is the process of bringing delinquent accounts current. Often called “reaging” an account, it occurs after making a series of on-time payments through the debt management program. Re-aging does not eliminate prior delinquencies; it allows a debtor a fresh start and an opportunity to begin building a positive payment history. – Source

But since included accounts will be closed by the creditor, even they say that on the same page, then the primary benefit of that account on the credit report will not really help moving forward.

According to the IRS, Trinity Credit Counseling is a 501(c)3 organization. The last public tax return of the charity was in 2010.

At that time the directors and officers were listed as Orville Robinson, Randall Wheeler, Doug Taylor, Robert Bicknaver, Gary Vosick, Caroline Leonard, and Jade Durham. Vosick is the president and his salary was reported as almost $303,000 with all included compensation. Vosick also appears to own Vosick Enterprises and was paid an additional $90,000 for a line item labeled as LLC Leases and later described as a lease of the office building to Trinity Debt Management.

Another interesting statement is that apparently the company does not have it’s own employees. The statement made on the 990 says, “The organization leases all of its employees from an unrelated third party leasing company.” Yet the company did not list their independent contractors on their return. – Source

Please post your responses and follow-up messages to me on this in the comments section below.

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Trinity Debt Management Was Recommended at a Church Meeting. Are They Legit?   Theresa
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Jade Durham

    As an employee of Trinity, I need to clarify several items that were mentioned in Steve’s response. The length of credit history only makes up 15%, not 35% of your credit score. Reference http://www.myfico.com to learn more. Trinity Credit Counseling, DBA Trinity Debt Management is located at 11229 Reading Rd. Cincinnati, OH 45241. Maryland law requires that the Commissioner’s address be listed on all material, that is why the landing page http://www.mydebthasmedown.com lists that address. Trinity is licensed through the MD Office of the Commissioner of Financial Regulation. That is why there is no registration with the MD Department of Assessments and Taxation. They do not regulate debt management companies. Trinity is a Christian based company that assists clients in becoming debt free and improving their financial situation through debtor education and counseling. For clients struggling with unsecured debt, they may be recommended a debt management program as a means to become debt free. While Dave’s response included a lot of information, clarification was necessary to correct the information provided.

    • http://GetOutOfDebt.org Steve Rhode

      Here is what Craig Watts, the spokesperson for FICO says:

      The FICO algorithm does give more weight to recent credit activity. Taking that one step farther, if in your example those were the only credit accounts for consumer B, she likely wouldn’t have a FICO score at all now. Minimum requirements for calculating a FICO score are that the credit report must contain at least one account at least 6 months old, contain at least one account that has been updated by the creditor within the previous 6 months, and have no deceased indicator. If consumer B’s accounts have all been closed at least 2 years, her credit report almost certainly won’t satisfy that second condition.

      Other factors come into play too. Roughly 30% of a FICO score consists of “amount owed” factors, and a significant piece of that action is credit utilization rate. The algorithm assesses the utilization rate of each open and active revolving account, and separately of all such accounts in aggregate. Closing an account usually removes it from that calculation and can change the aggregate utilization rate. That isn’t sufficient reason to keep an account open, mind you, if the person will rest easier if it’s closed. But it’s another way that closing a revolving account can affect the person’s score.

      Going back to your original question, the credit counseling company asserted that 1) accounts once included in DMP and now closed by creditor will have no impact on credit score, and that 2) a DMP will improve a credit score.

      Assertion 1 is incorrect since the closed accounts will continue to influence the score’s assessment of length of credit, and the ABSENSE of the accounts from the credit report could influence other factors such as credit utilization rate.

      Assertion 2 is incorrect since a DMP is not a single event but an umbrella for a variety of credit actions over some length of time, each of which will influence the person’s credit score when lenders report them to the credit bureau. The impact of each credit action on the score will depend on the action itself and on the other information present on the credit report. Therefore while a DMP may in aggregate improve the person’s score, it also may lower the person’s score. I would be willing to say that a DMP will improve a credit score only if the DMP is restricted to two type of actions: paying all bills on time as agreed, and paying down existing credit obligations. If the DMP includes any other actions — including closing accounts — we can no longer generalize about whether the DMP will improve the person’s score.

      • http://twitter.com/TrinityDebt Trinity Debt Mangeme

        Thank you for elaborating on your explanation for credit
        scoring. Bottom line, there are a lot of factors that contribute to your score.
        I will say that the debt management program was established to help people that
        were struggling to make their payments or were already delinquent and were not
        getting any relief from their creditors. For these individuals, the relief that
        the debt management program offers and the ability to see that in 3-5 years
        they will be debt free is such a relief to their burden that their credit score
        is an afterthought. Debt Management plans were not created to help people with
        high credit and a good payment history. While potentially saving thousands in
        interest is a great for anyone, it was created to really help those in need. It
        should also be said that debt management companies are not credit repair
        companies. It is not our mission to improve client’s credit, it is to help them
        become debt fee.

         

        I agree, Cambridge Credit Counseling does an excellent job
        of gathering client data and creating statistics. Ultimately, a debt management
        company can only provide the educational tools to help people improve their
        financial situation and become debt free. It is up to the client to follow
        through with the program. (There are of course uncontrollable circumstances
        such as layoffs and medical hardships that the client cannot have power over)
        For Trinity, roughly 40% of the clients that enroll on the debt management
        program pay their debt in full through the course of the program. Another
        15-20% pay the debt off through other means.

         

        Regarding the regulatory aspect of the industry,
        most states have their own law for debt management companies. Going back to the
        state of Maryland, any company offering debt management services in the state
        must be licensed through the Department of Labor, Licensing and
        Regulation/Commissioner of Financial Regulation. Trinity’s license number is
        4140484.

      • http://GetOutOfDebt.org Steve Rhode

        It’s not clear from your statement but is Trinity screening consumers for the best solution for their debt problem or focusing on enrolling people into the DMP? You make no mention of settlement when it is appropriate. Do you assist people with cash on had to settle to negotiate with their creditors?

        If you want to quote some performance number, please provide the support as Cambridge does, otherwise there is no way to evaluate the claim. “Roughly” isn’t good enough.

        You appear to be saying that you are doing business in Maryland but have elected to not register as a foreign corporation. You need to be registered in the states you conduct business as a foreign corporation.

        From the State of Maryland: “A nonprofit incorporated in another state (or a foreign country) may operate in Maryland, with facilities and/or employees based here, by registering to do business here as a “foreign” corporation, and then generally following the same procedures as any other business entity in the state.”

        “The general requirements regarding foreign corporations are in Title 7 of the Corporations and Associations Article of the Annotated Code of Maryland. Section 7-202 addresses the requirements for registration to do ‘interstate and foreign business’ (only) and 7-203 the requirements for qualification
        to do ‘intrastate’ business. Section 7-205 specifically addresses the issue of resident agents for foreign corporations and Section 2-108 addresses resident agents in general.”

        If you feel you are not required to be registered as a foreign corporation, please help me to understand the reason why.

  • http://twitter.com/TrinityDebt Trinity Debt Mangeme

    As an employee of Trinity, I need to clarify several items
    that were mentioned in Steve’s response. The length of credit history only
    makes up 15%, not 35% of your credit score. Reference http://www.myfico.com to learn more. Trinity Credit
    Counseling, DBA Trinity Debt Management is located at 11229 Reading Rd.
    Cincinnati, OH 45241. Maryland law requires that the Commissioner’s address be
    listed on all material, that is why the landing page http://www.mydebthasmedown.com lists that
    address. Trinity is licensed through the MD Office of the Commissioner of
    Financial Regulation. That is why there is no registration with the MD
    Department of Assessments and Taxation. They do not regulate debt management
    companies. Trinity is a Christian based company that assists clients in
    becoming debt free and improving their financial situation through debtor
    education and counseling. For clients struggling with unsecured debt, they may
    be recommended a debt management program as a means to become debt free. While
    Dave’s response included a lot of information, clarification was necessary to
    correct the information provided. 

    • http://GetOutOfDebt.org Steve Rhode

      It is true that myfico.com does say that payment history is 35% of the score and payment history is 15% but in my example I was using the number as an overall impact and a blend of the two since there is a credit utilization compenent that is in play along with length of credit. The numbers are not hard and fast.

      The general idea though is that it does have an impact which you do not appear to mention with as much clarity as the cons with other solutions. 
      Take this statement from Greenpath Debt Solutions, another credit counseling group as an example of the impact. 

      “A key component of your score is to practice self-control from tapping into all of your available credit,” says Dorothy Barrick, a group manager and financial counselor at GreenPath Debt Solutions. Lenders want to see that you have access to credit but the financial discipline not to exploit it. Closing open accounts will actually hurt your score by skewing your credit utilization ratio, which is the percentage of your available credit being used at any given point. “The smaller the percent, the healthier your score will be,” Barrick says.”

      Is there a particular reason Trinity is not registered as a foreign corporation in Maryland? Trinity should be registered in every state they are doing business. You do not appear to be.

      Since you are a Christian program, surely you will not have any problem then sharing your most recent performance numbers for readers to use to compare your services. What percentage of people that enroll wind up paying off all their debt through your program? What percentage drop out?

      In fact if you want a guide on performance sharing see this http://www.cambridge-credit.org/transparency.html They do a great job on transparency and they are not even a Christian based credit counseling group.

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