If you’re struggling to make the minimum payments on your debt, missing due dates and not making any substantial headway in the process, you’re credit score likely already mirrors your situation. After all, these three numbers are supposed to be the quickest snapshot of your financial health and ability to repay creditors.
Debt consolidation may be an option you’re considering in order to regain some solid footing, but it’s important to note how this move can impact your credit worthiness and score. Will it lend a helping hand or kick you when you’re down? When you’re ready to give debt consolidation serious consideration, be sure check out ReadyForZero’s debt consolidation tool.
It depends on a variety of factors. Here are a few.
The Type of Debt Consolidation You’re Considering
While the basic principle behind debt consolidation – taking debts and combining them into one, hopefully more manageable debt – is essentially all the same, there are different ways to go about it.
Debt consolidation through a debt relief company or bank usually entails this third party negotiating for lower payments or rates on your behalf, sometimes capitalizing on relationships they have already established with your creditor.
If credit card debt is what you’re struggling with, then this type of debt can be consolidated through a balance transfer onto a new card with a low APR, or perhaps a 0% APR during an introductory period.