How does consolidating affect your credit intimidating trio
Tip: Triple check lenders’ certifications to make sure you’re dealing with a legitimate site if you’re shopping for a loan online. Effect on Your Credit Consolidating credit cards with high balances using an installment loan (i.e.a loan with fixed monthly payments) may actually benefit your credit rating, especially if you use the loan to pay off credit cards that are near their limits.The content is broad in scope and does not consider your personal financial situation.Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy.And the fact that many people do just that is why the action will temporarily cut your rating.For the record, and for those who don’t know the difference, a credit rating and a credit score are 2 different things.Do you have a workable spending plan that includes putting money aside for future financial goals?If you don’t know why or how you amassed ,000 in credit card debt, begin there.
It uses a complex mathematical algorithm to come up with a score that predicts whether you are more or less likely to default on your next loan.SEARCH RATES: If you’re considering a personal loan for debt consolidation, first check out the rates at Moving the balances of your credit card accounts into an installment loan for purposes of consolidation may cause a slight drop in your credit score.The cliche about rearranging the deck chairs on the Titanic came to mind when I read your question.Debt consolidation won’t address the real problems that may sink your credit rating!
Without taking these positive money-management steps, consolidating your debt will not help your credit rating in the long run but could create the potential for disaster instead.