Consolidating credit cards good or bad

This statement may be viewed negatively by lenders who manually review your report.

Programs like this may lower your monthly bills, but because you are not re-paying the full amount owed on your accounts, your creditors will likely report those accounts as “settled” or “settled in full for less than the full balance.” Because it indicates that you did not pay the account as agreed, a status of settled on your credit report will impact your credit scores negatively, even if there are no late payments on the account.

You’ve got several options when you make the decision to eliminate debt.The second type of debt consolidation you may hear about are debt management plans offered by debt settlement companies.With these programs, the debt settlement company may be able to secure lower monthly payments with your creditors by negotiating a reduced balance on your accounts.People often ask us about debt consolidation and whether consolidating their debts will affect their credit.Whether consolidating your debt is a good idea depends on both your personal financial situation and on the type of debt consolidation being considered.The first is the kind you describe, where you apply for a personal loan, preferably one with a relatively low interest rate, and then use the money from that loan to pay off all your credit card balances at once.

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