Do Credit Card Debt Consolidation Companies Affect Your Credit?

There are several companies advertising ways to erase your credit card debt and instantly repair your credit rating. Unfortunately, there is no magic way to erase debt, nor is there any way to instantly repair a damaged credit rating. That is not to say that it can not be done. Credit repair is absolutely possible, and if you have a great deal of credit card debt, a consolidation loan might be the best first step for you to take.

A credit card consolidation loan professional can help you sort through all of those credit card bills you have been shoving in a drawer hoping they would disappear. They can help by negotiating with your creditors to get fees and penalties removed to lower the balance you have due. Once the negotiations are completed for all of your creditors, the terms of your consolidation loan will be disclosed. When you are approved for the loan, the money will go toward paying off your outstanding credit card debt.

Instead of making several minimum payments to different companies, you will simply make one payment to repay the debt consolidation loan. The credit cards will show on your credit report as paid in full, and as you continue to keep up with your loan payments, you will watch your credit score begin to rise.

Do your research and be sure that you find a reputable debt consolidation company. Once the delinquencies have been paid and you are making your loan payments on time, along with paying any other debt that you have on time, your credit rating will get better as each month passes. As you begin to create a positive credit history, you will watch your credit score skyrocket.

There is legitimate help out there for those people that have become overwhelmed by quickly mounting credit card debt. A debt consolidation loan can help you get back on track financially and restore your credit rating.

Do Debt Consolidation Services Hurt Your Credit Rating?

Many people believe the myths or gossip that is associated with debt consolidation. After all it is easier to believe a negative side to something that will get you out of debt, albeit a difficult process to undertake. It's almost like the old wive's tales that tell you that "losing weight when you are overweight is bad for your health." In this case the myth we are talking about is the one where people ask: Do debt consolidation services hurt your credit rating? Most people that don't want to deal with getting rid of their debt will say "yes."

But how is that possible? You are already in debt up to your ears, creditors are calling right and left - your credit scoring is already hurt. Debt consolidation services cannot hurt your credit rating any further. Quite to the contrary, they can only help your credit rating and make it better. Doing a debt consolidation is not - declaring bankruptcy - you are actually avoiding bankruptcy, owning up to your debt and paying it off in a debt consolidation agreement. This means once you have consolidated your debt, and you start making your monthly payments on time, your rating will begin to improve. You have 0 debt on your credit cards, so the moment you consolidate your credit rating will improve.

Now, there are both advantages and disadvantages to this credit scoring improvement. First You won't have creditors calling, so you can start relaxing, and that is an advantage. But the disadvantage lies in the fact that those credit cards will be tempting, and you may get even more credit card offers, but you need to stay away from them, because incurring more debt will negatively affect your credit rating.

Hopefully this will have answered your question as to: Do debt consolidation services hurt your credit rating, and make you take that final decision of finally clearing up your credit debt. Granted, it is a painful decision, as all things that are good for you are painful, but it is the best and fastest way of getting out of debt.