How Is Credit Affected Through Debt Consolidation?The age
old question on everyone's mind.
Will Debt Consolidation affect
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
How good is my credit really?
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
is important, 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: Timely payments.
- 30% of your
credit is determined by: Amounts Owed
- 15% of your
credit is determined by: How long you had credit.
of your credit is determined by: How much of your
credit is new.
of your credit is determined by: The type of credit
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
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 offers.
FREE BAD CREDIT
DEBT CONSOLIDATION PROGRAM
bad credit Debt Consolidation Management program can
- Reduce your
monthly payment amounts
- Reduce or
- Improve or
- One lower
- Improve or
- No home
ownership or credit check
- No obligation
- Path to becoming
to fill out a short form for free consultation.
And Debt Consolidation
debt consolidation program,
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
- 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
- Make Timely Payments!
A note from the author;
If credit is a major concern,
we have created a powerful free article called
Boosting Your Credit Score
which also includes a complete downloadable guide on how
repair credit and raise your credit score. But consumers who
are struggling with debt should
seek to eliminate it as a priority over all.
unsecured debt will play a major role in your credit score
not to mention
Consumers who feel they need help should consult a
who 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
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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