Archive for 'Debt Consolidation'
Improving Your Credit Rating By Consolidating
Posted on 25. Jan, 2009 by admin.
I have heard numerous myths that state that by consolidating debt, you hurt your credit rating. During this article, I hope to put this myth to rest. Firstly, there are two types of debt consolidation. There is a force consolidation from your bank or third party lender in which they clear all of your debts on your behalf and in turn owe them the funds. This can, in some cases put a black mark or flag on your credit rating with that particular lender / bank - but not on your overall credit report. For the most part anyway.
Debt consolidation in general actually helps your credit rating, especially if you’ve got lots of debt with lots of providers. It’s a good thing to have outstanding credit from 1 or 2 lenders. This works in your favour as it shows you can be trusted with credit. However, once you start getting debt with 4, 5 or more lenders then it starts to look suspicious. Especially if you start missing the odd payment here and there. In this situation, consolidating the debt from the 5 different lenders can actually help your credit rating. Not only will you have a smaller, more manageable monthly payment. You will also just have one, well serviceable debt source which can only do good things for your overall rating.
My advice to you is to consolidate on your own behalf before you’re in a position where your bank or third party lender forces you to do so. By doing this, you protect your overall credit rating and make your debt much more manageable. Not only that, if you consolidate all of your debts, you will be using your hard earned monthly income to actually pay off the debt itself as opposed to just high interest charges such as those charged by your credit card company.
Continue Reading
Consolidate Your Debts To Make Savings
Posted on 18. Jan, 2009 by admin.
Lots of people have debt in some form or another. Some more than others. Some significantly more. Whatever your debt may be, be it a personal loan, secured loan, credit card, store card or even mortgage. There is nearly always a better way to manage it and nearly always a way to save money. Take personal loans for example. If you took out a loan several years back at a fixed interest rate, you might be able to find a better interest rate on a different loan now and clear off the old one. Take credit cards also, you might have a balance on a card and are paying 20% APR where as you could take out a new card at 0%, transfer the balance and instantly start saving money each month. As I say, there is nearly always a way to save money.
The same goes for debt consolidation. Debt consolidation shouldn’t just be looked at an option if you cannot afford to service all of your money debts. It should also be considered even if you can easily afford all of your debt payments, purely for the money saving consolidation can bring. It doesn’t matter how much income you earn each month, if you’re paying 20% interest on 3 or 4 maxed out credit cards then you can consolidate those and make yourself a significant saving. You might be quite easily able to pay 20% APR on your debts, but why bother, there is no point giving money to your credit card company for nothing.
If you have debts, no matter how large or small, always look for a way to either decrease them or wipe them out completely. There is no point having debt if you don’t need to and as I say above, there is near enough always a way to make a significant saving.