Debt Consolidation Options
For some reason people get very nervous when you mention debt
consolidation. Some people think that it will hurt their credit
– but it really depends on the kind of debt consolidation that
you get. If you get one with a settlement, then yes, you are
going to probably see a reduction in your credit score; but if
you get one without you won’t.
There is something called a debt consolidation that includes a
debt settlement. Anytime you settle a debt with a company it
goes on as a negative comment on your credit report. This is
because you are not paying back the entire amount that you owe
them, rather just a portion thereof. This is along the same
lines as a bankruptcy and should be avoided if at all possible.
But if you get a regular debt consolidation it should not affect
you in a negative way. The debt consolidation simply takes the
money that you have in all of your different places and puts it
into one loan. This debt consolidation will give you a new loan
that is everything else rolled into the one. This new loan will
pay off all of your existing debt, and will be a lower payment
so as to make things easier for you.
They both do the same thing which is ultimately get you out of
debt. However, if you are worried about your eventual credit
score, you will want to go with the debt consolidation and not
the debt settlement.
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