Does Debt Consolidation Affect Credit Rating?

Are you considering a debt consolidation loan or a debt consolidation program

? Have you ever wondered if debt consolidation affects your credit rating? Here is 3 reasons why debt consolidation affects credit ratings in a positive way.

Tip #1

Your massive credit card debts have a very negative effect on your credit rating and score. You probably do not know this, but once you exceed a balance of over 25% of your credit limit on any credit card it starts to negatively affect your credit score, even if you pay your payments on time. So if you consolidate debts that include credit cards with high balances, then you are doing yourself a favor and helping your credit.

Tip #2

You can consolidate not only credit cards, but if you have a car or a personal loan, then when you consolidate those and pay them off you will improve your credit rating. The credit companies love to see that you paid off a car or a personal loan. It helps to boost your credit score quite a bit.

Reason #3

If you have enough debt that you are considering consolidating it, then it is obvious that you need to. The key is that if you consolidate your debt and payoff credit cards, then you need to stop using the credit cards and get rid of them. Some people will consolidate their debts, then run their cards right back up to where they were and that is a bad idea. You will end up in a worse situation, then you were in to begin with.

by: Jared McDermott

POST COMMENT

Ways On How Late Payments Hurt Your Credit Score Who Offers the Best Mortgage Loans For Buyers With Good Credit? Credit Card Debt Consolidation to Reduce Your Payments an You Negotiate Credit Card Debt Reduction? The Basics of Credit Card Shock Bad Credit Loans : To Ensure Finance Despite Past Mistakes With A Fast Bad Credit Loan, Get Money When You Need It Most Short Term Loans No Credit Check - Overcome From Your Fiscal Problems Loans For Bad Credit A Companion For You! Low Credit Score Unsecured Loans Have Payday Unsecured Loan Loans For Bad Debt - Fastest Payday No Credit Loan Unsecured Credit - To Finance Your Needs Bad Credit Loans - Change Your Fiscal Status Now!