Friday, 15 April 2016
If you are persuaded to get a debt consolidation, you might probably be wondering if this debt consolidation loan may have any positive effect on your credit ratings. Well debt consolidation does indeed have a positive effect on credit ratings and here are the three positive effects obtaining a debt consolidation loan will have on your credit score or rating.
1 Huge credit card debts will have a lot of negative effects on your credit rating, and obtaining a debt consolidation loan will actually go a long way in improving your credit ratings. Most credit card companies dont tell you that carrying a balance on your credit cards that is 25% above your credit limit will actually cause a drop in your credit score, despite the fact that you might be making your payments promptly.
2 Debt consolidation is not only limited to credit cards alone, if you have got other loans such as a personal or a car loan you can also consolidate them as well. This will give a boost to your credit ratings, they is nothing these credit companies love more than to see that you have succesfuly payed off your loan. This can give quite a boost to your fledgling credit score. Building a good credit score will require a little bit of time and patience and things like paying off a loan will help you arrive faster at a good credit score.
3 If you are struggling under the burden of a heavy debt, then you probably need a debt consolidation loan. The key to maiintaining a healthy credit rating is to put away those credit cards once you have succeeded in consolidating them. It makes no sense to go through the process of consolidating your credit card debts and loans only to run them up again. Maintaining a good credit rating will help you mould a better financial future for yourself and your family and the key is maintaining your discipline when it comes to using credit cards.