Does consolidating debt affect your credit score dating service profile examples
Keep in mind that you’re likely to need a good credit rating to get one of these cards.
You could also consolidate your debts into an unsecured personal loan, but again you’ll need a good credit rating to get the best deals.
Before you choose a debt consolidation loan, think about anything that might happen in the future which could stop you keeping up with repayments.
For example, what if interest rates go up, or you fall ill or lose your job?
Image source: Getty Imagescredit score in surprising ways.
The type of debt consolidation you choose and the habits you keep afterward will determine what happens to your credit score." data-reactid="25"Debt consolidation can help you get out of overwhelming debt, but it may affect your credit score in surprising ways.
As you've probably already figured out, debt plays a big part in your financial life.
Not only does it affect your spending ability, but it also has a direct impact on your credit score and a direct impact on your ability to borrow money or pay a low insurance rate.
For example, if you miss payments because you can’t afford your debt, you’ll lose credit score points.You might be offered a secured loan if you owe a lot of money or if you have a poor credit history.You should get free debt advice before you consider taking out a secured debt consolidation loan, as they’ll not be right for everyone and you could just be storing up trouble or putting off the inevitable.Ten percent of your credit score considers the types of accounts you have.Having experience with various types of accounts – credit cards and loans – helps increase your credit score.
(Note that your income isn't a factor in your credit score.) How you handle debt also has an impact on your credit score.