Does consolidating debt affect credit

There are three major types of debt consolidation: Debt Management Plans, Debt Consolidation Loans and Debt Settlement.

These are not quick fixes, but rather long-term financial strategies to help you get out of debt.

What are the benefits to this approach to debt consolidation, beyond simplifying your monthly payment requirements?

Here’s how credit card consolidation works: You first decide if you want to take out a new loan, open a new credit card or enroll in a debt management plan (more on that later).

One of the first things you’ll want to do is check your credit reports for accuracy.Not only does that simplify your debt payments, it can also help you save money.The best way to consolidate credit card debt — and whether consolidation will work for you at all — depends on your situation, so you might want to consult a non-profit credit counselor about your best options.For the record, and for those who don't know the difference, a credit rating and a credit score are 2 different things.A credit score is derived from items reported in your credit file.One of the worst things about falling deeply into debt is dealing with multiple creditors.

991

Leave a Reply