Consolidating your credit bad

06-Oct-2019 17:40

Lenders such as Prosper and Lending Club have higher credit ratings than banks and are known to have a lower minimum credit rating. An advantage is that the new monthly payment obligation can be much lower than before the consolidation.

A disadvantage is that many home equity loans have a repayment period of 10, 15, 20 or 30 years and the amount of time required to repay the debts can increase dramatically.

Also understand how the consolidated and new debt will be reported to the credit bureaus.

Beware of any company that promises to clear your debt or settle it for pennies on the dollar.

The credit usage is likely to be high for Flora Finchingijk for every consumer investigating debt consolidation, so the consumer must focus sharply on making all payments on time and avoiding new debts.

The conditions are strict (credit accounts are closed).

The borrower may also experience further credit score damage during the repayment period.

Check your credit card or loan statement or sign up on websites that offer free credit scores.

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(See Top Places to get a free credit score or report .) A search on the internet for “debt consolidation” yields many companies that are very successful in what they call debt consolidation.

Debt consolidation is most effective as part of an overall financial education program that better enables the borrower to avoid future debts. More information about finding a credit consultant – and click here and here for consumer advice from the US government about preventing scams.