MyCreditScoreReview.com
Title
My Credit Score: Debt consolidation: How it can help your credit report
Description
Debt consolidation: How it can help your credit report
If you want to improve your credit report, the best action to take is to ensure you’re paying your creditors on time. Debt consolidation could make this task easier for you by combining all your loans into a single loan, allowing you to make monthly payments to one lender. Your lender in turn pays each of your individual creditors, a debt reduction strategy that can simplify your monthly payment schedule. Additionally, some debt consolidation schemes offer lower monthly payments and interest rates, which can also facilitate the payment of debt. Also, it may help you eliminate late fees and bring accounts current. Some forms of debt consolidation include balance transfers in addition to debt consolidation loans. You can apply for a loan through a bank, credit union, or finance company. Or, you can transfer the balance of a high-interest rate credit card to a credit card with a lower interest rate. These programs are best used by individuals who seek seriously to get out of a financial quagmire by consistently paying down debt.
However, the Federal Trade Commission encourages consumers to think twice before consolidating their debt through a second mortgage or a home equity line of credit. These loans require that you offer your home as collateral, which you could lose if you are unable to make your payments. The FTC also reports that debt consolidation programs may have additional fees and closing costs that could prove costly but adds that such loans may provide tax breaks that are not available with other types of credit. Before you make a decision about how to pay off your debt, be sure to visit a nonprofit credit counseling service to make sure you’re making the best decision.
Languages
English
Additional Information
Related Domains
External Links
- Alexa: MyCreditScoreReview.com
