Are you considering a debt consolidation loan or a debt consolidation program? Have you ever wondered if debt consolidation affect your credit rating? Here's 3 reasons why debt consolidation affect credit ratings in a positive way.
Tip # 1
If you have a lot of credit card debt, then it affects your credit rating in a negative way. One thing that credit card companies do not tell you is that if you carry a balance on your cards and it is more than 25% of your credit, you are actually penalized on your credit rating, even if you pay your payments on time. So if you consolidate debts credit cards with high balances, then you are doing yourself a favor and helping your drawdown.
Tip # 2
You can consolidate not only credit, but if you have a car or a personal loan, then when you to consolidate and pay them off, you will improve your credit rating. The credit card companies love to see that you paid off a car or a personal loan. It helps your credit score to raise quite a bit.
Tip # 3
If you have enough debt that you are considering consolidation, it is clear that you need. The key is that if you pay your debt and credit cards to consolidate, you should stop using the credit cards and get rid of them. If you consolidate your debts and then you run your credit cards back up to their limits to do anything to help yourself. You will end up in a worse situation than you to begin with.
So if you are considering consolidating your debts in mind that debt consolidation will affect your credit rating and can be a positive way if you are responsible and smart with your debt consolidation.
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