Consolidating debt affect
Interest rates do not appear on a credit report; therefore, the interest rates on your credit cards do not affect your credit worthiness or credit scores.While consolidating those debts into a single payment with a lower interest rate can help you pay off debt faster, you should be wary of companies offering debt consolidation plans.Some plans require you to become delinquent on your accounts in order to enter into the program.Missing even one payment on an account will hurt your credit history and your credit scores.Additionally, if the company managing your payments under your debt consolidation plan fails to make the payments on time, you are responsible, and those late payments may be reflected on your credit reports.Plus, if the company convinces you to close all of your credit card accounts, it may negatively affect your utilization and you have no way to rebuild a rich history by using those cards in the future in a responsible way.A better option may be to find a reputable non-profit credit counseling company near you that can enroll you in a debt management plan.They can help you negotiate terms with your creditors and assist you with making sure payments continue to be made on time during any changes made to your payment schedule.
You’re in deep with credit cards, student loan debt and car loans.
Minimum monthly payments aren’t doing the trick to help nix your debt.
Something has to change, and you’re considering debt consolidation because of the allure of one easy payment and the promise of lower interest rates.
The truth is debt consolidation loans and debt settlement companies don’t help you slay mammoth amounts of debt.
In fact, you end up paying more and staying in debt longer because of so-called consolidation.
Get the facts before you consolidate or work with a settlement company.