subject: Debt Consolidation And Credit Score – Does It Affect Your Rating? [print this page] Debt Consolidation And Credit Score Does It Affect Your Rating?
Many men and women shrink back from debt consolidation programs because they are afraid that using such a program may reflect negatively on their credit report.
In truth, every month that you ignore your negative debt situation, your score continues its perilous downhill slide. Consolidation programs work to stop this downward slide immediately and then enable you to make monthly payments that actually improve your score in a short period.
Aurora Lillo Editor of the "Best Debt Consolidation Services" website -- http://www.BestDebtConsolidationServices.net -- pointed out;
"...Therefore, debt consolidation does indeed affect your credit score... in a positive manner. Instead of ignoring the problem, researching a number of consolidation programs and selecting on that meets your financial needs can serve as a proactive means of getting your score back up into healthy numbers..."
How it Works
When you enroll in a debt consolidation program, you are essentially taking out one large loan that is used to pay off all your creditors in one fell swoop. This means that the harassing phone calls stop and so does the monthly negative reports that are accruing in all the major financial reporting agencies. In addition, your consolidated debt is then repaid directly to the agency you have employed via monthly payments designed to fit your budget. Every time you send in your monthly payment check on time, your agency will report positive activity to financial reporting organizations. Each positive report works to improve your overall credit score, which means that in a very short period of time you can leave behind your 'poor' score and move swiftly through the ranks toward an excellent credit score.
Additional Perks
Lenders are interested in just one thing; getting the money that is owed to them. They would rather negotiate a single lump sum payment to close out an account than to have the payments drawn out or to hand the debt over to collection agencies that pay very little for each account purchased. When you are in possession of funds via a consolidation loan, you have a great deal of leverage to negotiate lower settlements with your creditors.
"...Many consolidation agencies are staffed with skilled negotiators that can work directly with your creditors to reduce the amount of money it will take to close your accounts once and for all. These negotiators can often get your total monies owed slashed by up to 50% of the original sum. The money you save can then be used to pay off your consolidation agency in a swift manner, further improving your financial score..." added A. Lillo.
Further information about trusted and reputable companies for debt consolidation by visiting; http://www.BestDebtConsolidationServices.net
