subject: Will Debt Consolidation Hurt My Credit? A Straight Answer [print this page] Will Debt Consolidation Hurt My Credit? A Straight Answer
The straight answer is this: debt consolidation will not and can not hurt one's credit unless that person chooses not to pay his or her single easy monthly payment.
To understand why this is, one must understand exactly how consolidation works. This process works by the consumer borrowing a large amount of money from the consolidation organization, typically enough to cover all or most of the debts that one has at the time.
Aurora Lillo Editor of the "Best Debt Consolidation Services" website -- http://www.ReputableDebtConsolidationCompanies.com -- pointed out;
"...With this loan one will pay off all outstanding obligations, meaning that his or her only remaining financial responsibility will be to the consolidation organization. With only one monthly payment that must be made, and a typically very low interest rate, it becomes very easy for one to meet all of his or her financial responsibilities..."
Credit consolidation is aimed at two markets: the market of people who are having trouble paying off their debts for financial reasons and the market of people who are having trouble paying off their red ink because they simply have too many accounts open, or for practical reasons. Therefore, because credit consolidation does not always indicate that one is insolvent or unable to pay his or her debts, it is not something that appears on ones credit report, meaning that if one can pay the organization that lent them the money, then that person will, in fact, have an improvement in his or her credit score.
This improvement shows up for most people, and is one of the goals of many consolidation organizations. Most companies will offer free credit counseling to people who sign up for their programs, and all such companies have a greater understanding for the problems that debtors are going through than does a typical bank. This is because the majority of people who sign up for such a program are having financial hardships, and need such help. This leads to a far more personal level of customer service, and programs that are aimed directly at a consumer's needs. If one is unable to meet a monthly payment, for example, such a company is likely to forgive him or her, and not immediately send a negative report to one of the major credit bureaus.
"...The truth is that this process will not hurt one's credit score unless that person is irresponsible in making his or her payments. And even if that is the case, one is likely to get far more understanding from any consolidation company than from his or her bank..." added A. Lillo.
Further information about trusted and reputable companies for debt consolidation by visiting; http://www.ReputableDebtConsolidationCompanies.com
