Does Debt Consolidation Affect Your Credit? Know The Dangers

Does Debt Consolidation Affect Your Credit? Know The Dangers

Many men and women in negative debt situations are paralyzed by the fear of never recovering.

They worry about what affect debt consolidation may have on their credit score, yet their inactivity serves only to worsen their financial condition.

Aurora Lillo Editor of the "Best Debt Consolidation Companies" website -- http://www.BestDebtConsolidationCompanies.net -- pointed out;

"...While it is true that there are certain dangers associated with streamlining your monies owed via a debt-relief service, these dangers are marginal and actually pale in comparison to the dangers of ignoring your slide into poor credit. 3 major red flags need to be considered before you decide to enlist in a consolidation program. First, you need to avoid con artists that promise the world but actually do nothing more than run off with your hard-earned cash. Second, you need to negotiate rates and loan terms that you can actually afford to fit into your budget. Third, you need to consistently make your payments to your debt-relief agency and curb negative spending habits. If you can educate yourself on these dangers prior to applying for a streamlined loan, you can stop your negative credit cycle and put yourself back on the road to complete fiscal health..."

Con Artists

For every con artist, there are a larger number of honest debt consolidation agencies willing to work hard on your case and provide honest work for honest pay. However, charlatans in the debt-relief arena make it necessary to thoroughly research any prospective companies before signing on the dotted line.

Realistic Plans

While it is a healthy ambition to pay off your consolidation loan as quickly as possible, unrealistic repayment schedules are a danger that should be avoided at all costs. The purpose of streamlining your debt is to make it more manageable and if you bite off more than you can chew in terms of the monthly payment you decide to arrange with your debt-relief company, you will only find yourself stressed out and sliding back toward financial ruin. Work with your organization to create a repayment plan that fits realistically into your current budget.

Stable Rebuilding

"...When you use a consolidation loan to pay off all your creditors in one fell swoop, your credit score will take a very temporary nose dive. The only way to repair this is to make your monthly payments to your debt-relief like clockwork. Every time you send in your check on time, it registers as positive activity with credit reporting bureaus and results in an improved credit score..." added A. Lillo.

Further information about trusted and reputable companies for debt consolidation by visiting; http://www.BestDebtConsolidationCompanies.net

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