If i consolidate my bills will i have a low credit score?

Answer 1

There is some useful advice here.

Answer 2

If you are talking about consolidating credit cards - you would probably see a big score drop if you close those cards after paying them off.

If you can get a loan with a smaller percentage rate than your cards have, you might think about doing that.

Again - DO NOT close the cards after you pay them off. If you do, your score will drop. How much depends on how long you have had the cards. Plus your utilization will suffer.

The best thing you can do is just stick them in a drawer and pull them out once every year or so and buy a tank of gas, then put them away. And pay the balance in full when you get your statement.

Also, I would suggest doing as one of the posters recommended, call the credit card companies and ask for a lower interest rate.

Answer 3

do you know what your score is now? ANYTHING that is 30 days late, 60 days late, 90 days late, 120 days late... they ALL take a toll on your score. IF you have never paid a bill late... but were just making your minimum payments they consolidation might be for you... just don't pay the payment late. ALSO, it will effect your credit IF A CONSOLIDATION COMPANY negotiates a "settlement" for less than what you owe on something. for example, if you owe 10,000 on a credit card and they negotiate it down to 6,000 your credit report will show a "charge off" and THAT effects your credit score. if a consolidation company just negotiates the INTEREST rate that will NOT show up on your credit report. charge offs show up on your report the same length of time as bankruptcy- 10 YEARS. if you are in doubt about what happens to your score, talk to a lender at a bank or financial institution BEFORE you pay for the assistance of a profit or (clearing my throat...) non-profit (clearing my throat again) debt consolidation company.

Answer 4

If you consolidate, you should think about actually closing some of the $0 balance accounts. That will give you less 'maximum debt'. There is a ratio that is looked at called dent to income. That debt is both what you owe and what you could owe if you ran all the cards to the max.

Consolidation is a good idea, closing accounts is better.

Answer 5

Many things affect your credit score. One positive is having long standing accounts (over long period of time). So if you close your long standing accounts, that can have a negative affect on your cards. However, consolodating onto the lowest interest card and getting rid of all other cards is a step in the right direction if you have debt. The key is getting a card with the lowest interest rate so save you money every month.

Also, many people fail to realize that you can just call the credit card company yourself and ask for a lower rate. Explain to them your situation and that you are trying to pay off your debt and become a more resposible financially, and quite often they will lower your interest rate.

Answer 6

no, in fact, it will probably go up, especially if you are paying off large credit card debt(s). The idea of consolidating bills is to lower your payments and/or eliminate/substitute short term debt or high interest rates for longer amortization and/or lower interest rates and the tax deduction for the interest you pay. You can deduct a home equity or mortgage interest payment, but NOT credit card interest. So, it often makes sense to refi and dump some bills. Just don';t do it too often, and chew up all of your equity. Your home's equity is your retirement, for most people.

Answer 7

It should raise your score when you have less accounts outstanding.
Unless you go through some kind of debt agency that says they will consolidate and lower your balances. That could ruin your credit if some gets writen off.

Answer 8

No actually it should make your credit score go up because, with consolidation you pay off all your debts and then you only pay one creditor. It makes your credit look even better than before.

Answer 9

I did that and found that it negatively impacted my credit by several points because I still maintained a large quantity of credit lines. The object is to trim the fat. So, get rid of a few by closing them. I do not think a voluntary closure should hurt you. I also ran into this situation many years ago when trying to buy a home.

Answer 10

Check with a Credit Counsellor- they will be able to help you with that.