How Is Credit Affected Through Debt Consolidation?The age old question on everyone's
Will Debt Consolidation affect my
Can my credit be repaired with Debt Consolidation?
The answer to this question is not a
simple YES or NO. There are several factors to
consider and understand.
Credit is affected in many ways and the consumer is
responsible for the
majority of it. Ask yourself this question first.
How good is my credit
Many consumers either kid themselves
or lack knowledge on how credit is really
determined and affected. Many
feel that their credit is excellent just because they
never made a late
payment. True, that making timely payments to your creditors
but it's not the only important factor when one's credit worthiness is
Many variable are considered when
credit is looked upon.
- 35% of your credit is determined by:
- 30% of your credit is determined by:
- 15% of your credit is determined by:
How long you had credit.
- 10% of
your credit is determined by: How much of your credit is
- 10% of
your credit is determined by: The type of credit used.
Now let's examine the 30% amounts owed.
This is really a two part analysis.
One is how much of the available
credit is used and the other is the debt to income ratio.
Debt to income ratio is the first credit
consideration looked at when applying for a major
loan such as a
mortgage. In other words, how is your income compared to what you
already owe and can you afford this loan?
So if a consumer never had a late
payment, makes $25,000 a year and owes $40,000 on
credit cards alone, how
good is their credit really?
Then there is the mighty credit score
which is greatly affected if amounts on credit cards
and lines of credit
are above 50% of their credit limit. And the closer consumers get to the
limit, the greater adverse affect is on their credit score.
Here's a fascinating fact: Did you
know that by paying down credit cards to 30% of the
credit limit can raise
your credit score by as much as 80 points?
The bottom line is that most consumers
who are experiencing financial difficulty are over
extended on their
credit, despite that their mail box is being cluttered with credit
FREE BAD CREDIT DEBT CONSOLIDATION
credit Debt Consolidation Management program can help
- Reduce your monthly payment
- Reduce or eliminate
- Improve or rebuild
- One lower monthly payment
- Improve or rebuild credit
- No home ownership or credit
- No obligation
- Path to becoming DEBT
Click Here to fill out
a short form for free consultation.
Credit And Debt Consolidation
A debt consolidation program,
by itself, will not have an adverse affect on credit.
Unlike bankruptcy, debt consolidation does not cheat creditors out of what is owed.
consumer is current
with all their bills and has a good credit rating, the creditors
policies stay virtually unchanged when entered into a consolidation program.
As long as
the monthly payments are on time, then the payments to the
creditors are considered and
reported on time. On the other hand if a
consumer is overextended with their credit and has
a poor debt to
income ratio, paying off their debts will improve their credit worthiness.
Tips For Maintaining Or
Improving Credit Through Debt Consolidation
- When choosing a consolidation company, make
sure they don't report to any
- When signing up for a consolidation program,
make sure you close all revolving
charge accounts yourself: One of
the requirements that the creditors ask is for
the consumer to
close all revolving accounts (credit cards or lines of credit) that are
entered into the program. After you sign up, call all your credit
card companies and
ask them to close your accounts. The reason is
that on your credit report, you want
it to state "Closed By
Consumer" instead of "Closed By Grantor"
- Make Timely Payments!
A note from the author;
If credit is a major concern, we have created a
powerful free article called
Credit Score which also includes a complete
downloadable guide on how to
repair credit and raise your credit score.
But consumers who are struggling with debt should
seek to eliminate it
as a priority over all.
Eliminating unsecured debt will play a major
role in your credit score not to mention
your financial lifestyle.
Consumers who feel they need help should consult a
can help them work out a budget plan or get them into a debt
If you would like to speak to one of our
consultants and see if such a program is right for
you, simply click here and fill out a
We offer this service at no cost or obligation and your
information is strictly confidential
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