Does A Debt Consolidation Agency Hurt Or Help Your Credit?

There are a number of questions people have about debt consolidation agencies

. People listen to the radio and hear ads about how damaging settlement services can be. There are warnings everywhere. Learning the truth about how consolidation services work is the key to understanding if it can help or hurt your credit. Paula de la Torre Editor of the "Best Debt Consolidation Services" website -- http://www.ReputableDebtConsolidationCompanies.com -- pointed out; Consolidation loans are a method of paying off debts, by paying off your high interest credit cards, with a low interest loan. The loan can be made as an unsecured personal loan, or as a secured loan. Secured loans provide the lowest possible interest rates. If you have no assets, unsecured loans interest rates are still far lower than credit cards. These loans can be made for various terms, or lengths of time. The lower the interest rates and the longer the terms, the lower your monthly payments are So how does this affect your credit? Once your high interest loans are paid by the debt consolidation, they can no longer negatively impact your credit. If there were negative marks against your credit already, it will not get rid of them, unless it was negotiated for before the loan. This is offset because you do show successfully paid for lines of credit. This can help your credit. You can further help your credit score by using the money that you are saving each month to pay against the principle of the loan and to save some of it responsibly. This shows greater financial responsibility and only helps your score. The earlier you can pay off the loan, not only reduces your total debt, but will again show as a line of credit successfully paid off. Is there a way that consolidation loans can hurt your credit? If you do not do your homework, you may end up with a loan that is not favorable for you. It may still be too high to make the monthly payments. If you miss these payments, they will go against your credit report. If you become irresponsible with your money, you may find that your credit suffers P de la Torre added. Debt consolidation is a great tool to get out of debt. It is only a tool. Choosing the right tool and using it correctly, is up to you. Your credit is very important, so choose your services wisely. Make sure that you stick to your budgets and you will see your credit score become stronger. Further information about trusted and reputable companies for debt consolidation by visiting; http://www.ReputableDebtConsolidationCompanies.com

Does A Debt Consolidation Agency Hurt Or Help Your Credit?

By: Hector Milla

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