does bill consolidation affect my credit score in any way, good are bad?

Answer 1

It really does depend on how you plan to consolidate. From personal experience...

I racked up alot of unsecured debt. The reasons are not important to this question. Five years ago I entered a Consumer Credit Counseling Service (CCCS) program with a very heavy debt load. I have paid them a very small fee to accept money from me and to use this money to pay off my debt. Some account payments were/are reported as timely. Others were reported as more than 60 days past due even though they are not. My husband sent proof of timely payment to a credit reporting agency and in less than a month, had the "past due" accounts amended to say something like "pays in timely manner." Having any debt reported as being paid on time does garner you a higher credit score. And after a debt is paid off, you will often see that the account has been closed by the creditor. That is a ding to your credit.

I was forewarned that entering CCCS would stay on my report for many years, making it more difficult to obtain credit. But, that is part and parcel with learning new habits. Sort of a negative reinforcement.

Just this month, I refinanced my home and took some of the equity in cash to pay off the remaining debt. This action will save our family more than $1000 a month in outlay. The telemarketers are now breathing down my neck. So, I assume that consolidating by loan is good in the eyes of potential lenders/creditors. I can't see how that has any affect on my debt/income ratio. But, it does lower my monthly bills. And, the lending industry is aware. They had to figure it somehow and my credit report/score is the only thing they have access to.

Clear as mud?

It is important to change your mindset about credit. I am proud to tell telemarketers and department sales clerks who try to get me sign up for their credit cards, "No thanks, I stopped charging five years ago."

Getting out of debt is hard. Staying out of debt is honorable. You can do it no matter what route you choose.

Answer 2

It depends on how you consolidate them. If you borrow enough to pay them all off and make the new payment, good. If the consolidation crashes, you're back where you started.

If you mean one of the consumer credit counselling agencies, usually bad, because nothing changes as far as what is reported to the credit bureaus and you have the extra expense of the agency's fee, if any. Also, they do not stop interest or late fees, and each card issuer will lowere interest by a different amount.

Better to go through bankruptcy. Everybody gets treated alike and no one can sue or do anything else to collect on the debt.

Answer 3

Consolidation is the main suitable answer attainable to the credit cardholders to advance their destiny credit. human beings decide for debt consolidation for many motives: prolonging the internal maximum loan era from 5 - 15 years and reducing the interest value. Consolidation enables you elect for a private loan with decrease interest value than the single you're presently paying. besides it simplifies the internal maximum loan reimbursement as you're paying purely one lender fairly than countless money to diverse creditors.

Answer 4

here's the thing about credit: you need to have several accounts (some loans aka Installment, and some credit cards aka revolving debt).

So if you pay off your CC's with a loan, your low balance ratio would instantly up your score (if you were over 50% utlization prior to getting the loan.)

But if you then close the CCs an have just a loan, this isbad-- you need to have LONG STANDING accounts, not just new ones.

So if you can pay them off BUT KEEP THEM OPEN, it is most beneficial.

Answer 5

Good, once you pay off everything and the credit report shows everything paid in full.

Then BAD, because all those credit cards come back to you to throw you in debt again.

Answer 6

It depends on how you consolidate your debts.

Ways to Consolidate Debt

Answer 7

If it reduces your monthly payment, great.
But it doesn't reduce the amount you owe.
It may raise your score a little at first...but be late or miss a payment...