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Debt Consolidation Credit Rating

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Ronnie Said:

What effect does using one of these "debt consolidation" companies have on your credit rating?

We Answered:

Jimbo,
I listen to a radio show every day (Dave Ramsey ...look it up, it's pretty interesting). He says that debt consolidation does some damage to your credit rating, they're not good plans and sometimes the mess up. He also notes that if you don't change your behavior, you're going to get back in debt. He has a process where you pay minimums on every debt you have and then pay everything you can on the smallest. Then once that's paid off, work on paying off the next.
This is part of a bigger (but very simple) plan he details for free.

Betty Said:

Please explain to me what a debt consolidation is. Is is bad for your credit rating? Why doesn't everyone?

We Answered:

If you have numerous debts all at different rates, some rather high a debt consolidation loan can be a great idea. You may be able to get a lower rate and have only one payment. There are a couple of problems however. In light of the recent sub-prime mess the people who need them most are least likely to qualify for a consolidation loan at a decent rate. Another problem is lack of discipline. Many people who qualify for such a loan once they see their credit cards are paid off go back into their old bad habits and crank up the cards again and now have both the credit card debt and the new consolidation loan.

You say you have great credit but a large amount of debt. Your credit may not be as good as you think.

Barbara Said:

Could debt consolidation hurt my credit rating?

We Answered:

You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments - buildcredit.ifastnet.com

Michele Said:

Does it affect your credit rating to get a debt consolidation loan?

We Answered:

Yes because you are taking on new debt. Although if you make your payments on time for a few years your credit rating could be higher than when you started granted all other payments you owe you make on time.

Irma Said:

Does anyone know whether a debt consolidation loan would affect my credit rating?

We Answered:

Your credit rating is a measurment of how safe of an investment you are. If you have a high Credit rating you are considered safe. If you have severall loans you are not necessarily considered to be an unsafe lendee. However if you miss payments or some of your loans are credit card based and near or at the credit limit you would be considered risky.
Money is money, and you would want to borrow money at the lowest interst rate possible. You need to look into the current interest rate you are paying and compare it to the consolidation interest rate.
When a person applies for a lot of creidt in a short amount of time their credit rating is affected adversely. Due to this if you are getting this consolidation loan near to another loan you received you could damage your credit rating slightly.
However, paying off high interest loans with the consolidation loan and then making your payments on time would do more good than bad.

Vicki Said:

i'm looking for an unsecured loan of 15000 for debt consolidation with a fair to bad credit rating. reccomend

We Answered:

Go to Citizen's Advice before you get raped for every last penny you have. Your Ad Here

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If you have severall loans you are not necessarily considered to be an unsafe lendee.

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