Im trying to repair my credit. So I don't want to do anything on the negative side.
2006-06-29 16:14:57 · 6 answers · asked by Anonymous in Business & Finance ➔ Credit
When you consolidate your bills, your credit already looks bad. You are trying to fix your budget, not your credit score.
It does hurt your score because you are not increasing the amount of available credit you have. If you have too much available credit it looks bad to potential lenders. That's why having several credit cards actually hurts your score. You may think it's cool to have $100k in available credit, but it scares the hack out of a lender when he see you make $35k a year and are asking to buy a home.
Consolidation loans are fine, but here is a warning. You have to quit using credit! Thousands of people have fallen into this trap. They consolidate their bills and pay off credit cards, only to turn around and charge on the now-empty cards again. Now they have twice the debt, and end up filing for bankruptcy.
Closing out your credit cards will also lower your credit score, but if you close one every 3-4 months the effect will not be that great. Eventually, once you have closed out some unused cards, your consolidation loan won't look that bad.
Go to http://www.myfico.com and learn more about how credit scores are calculated.
2006-06-30 04:24:02 · answer #1 · answered by Anonymous · 0⤊ 0⤋
No problem with consolidating your debt. Make sure you have at least 2 credit card accounts that stay open and less then 50% on the balance of the line.
Example if you have a $10k line, keep the balance below $5K.
2006-06-29 16:20:26 · answer #2 · answered by tony 2 · 0⤊ 0⤋
I knew someone who consolidated their bills and they informed me that it does lower your credit score some. I was also informed that it looks bad to creditors if a consolidation is recieved. On the flip side you will be able to start to improve you credit.
2006-06-29 16:31:29 · answer #3 · answered by sahfrog 1 · 0⤊ 0⤋
A consolidation loan will pay off existing debt and lower your monthly payments. By paying off existing debt, that shoold help your credit score.
2006-06-29 16:21:23 · answer #4 · answered by Michael R 4 · 0⤊ 0⤋
NO! do no longer attempt this. It does impression your credit and also, those agencies are not any more regulated. lawyer Generals in each state maximum folk of shopper lawsuits is about CCCS agencies. you could signal in with a company and then they can promote your account to a distinct company. in the best they can accomplish that a lot extra damage than they do good. in case you confirm to do it, bypass to a company regionally the position you could sit down with the fellow. do no longer USE a company you stumble on on line! because maximum of them are very unethical.
2016-11-15 11:02:32 · answer #5 · answered by ? 4 · 0⤊ 0⤋
yes, it did for us
2006-06-29 16:58:06 · answer #6 · answered by Terri L 2 · 0⤊ 0⤋