Debt Consolidation Helps Repair Credit And Raise Credit Score
When it seems like no sooner your monthly check comes the money starts to vanish into multiple debt payments, you might be facing the harsh reality that your debts are spiraling out of control.
Different loans carry different APRs and terms of repayment which can be confusing and overwhelming. If repaying debts seems insurmountable it might be time to take professional help and consider debt consolidation. Your chosen lender will then provide you with a single loan with a lower rate of interest to cover that consolidated payment. Often these companies will broker negotiations with credit card companies to lower rates of interest and even reduce the total amount owed.
Hector Milla Editor of the “Best Debt Consolidation Services” website — http://www.BestDebtConsolidationServices.net — pointed out;
“…Contrary to what many people believe, a carefully drawn consolidation plan with good terms can actually help repair your faulty credit and also help raise your credit score. Your new single loan should be used to pay off your high interest credit card loans first. This greatly helps your credit evaluation, because it shows credit being paid off. While most APRs on credit cards are around a high 23%, consolidation firms offer loans at much lower rates. This also improves your debt to income ratio. You are also driving down your monthly payments which is also the first thing to ease you out of distress. This is how debt consolidation can prove remedial to your financial crisis situation and have a positive impact on your credit scores…”
A common mistake people commit when they are trying to increase their credit score is to close several of their operating credit cards. Availing credit on credit cards can be a double-edged sword. Canceling them signals that your one-time potential to raise credit with a demonstrated ability to pay off now stands damaged. So rather than canceling out your credit cards, use their existence to show that you still are seen as credit-worthy by credit givers. Here again, debt consolidation is almost your only way out to help retain them and yet not fall behind on payments as that would damage your credit score. Just be cautious that you never miss payments on a debt consolidation plan as this will undo the entire repair to your credit again.
“…Lastly, do not forget that what landed you in this situation. It would be raising credit that is disproportionate to your ability to pay off. And certainly, do not live in ‘financial denial’. Not using this single loan remedy may mean bankruptcy a few years later. Choosing the right lender, exercising discipline and proper budgeting can lead you to a debt free life in a few years…” H. Milla added.
Further information about trusted and reputable companies for debt consolidation by visiting; http://www.BestDebtConsolidationServices.net
Hector Milla runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.
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