Home Credit Cards How To Consolidate Credit Card Debt Without Hurting Your Credit Score

How To Consolidate Credit Card Debt Without Hurting Your Credit Score

This article is about how to consolidate credit card debt without hurting your credit score. No matter what you do, debt consolidation will definitely leave its mark on your finances, just like every other debt relief methods. A lot of debt relief options can affect your credit score. Thus, it becomes imperative you understand that choosing the wrong method will not only waste your time, but also your effort and money as you try to relieve yourself of debts. On the other hand, the right and effective strategy will provide a solution to your credit issues.

Truly, it is quite difficult to get out of a high credit balance. It is literally impossible to pay off your credit card debts over night, unless, of course you win the lottery or someone gifts you with a huge cash. Hence, you have to accept that it will take some months to totally pay off your credit card debt. Remember that the more the balance, the more time it will take to finally attain a zero debt status.

How Can Credit Card Consolidation Affect Your Credit?

In debt consolidation loan, your credit score can be badly affected by the hard inquiry that the lender will make on your credit report. Applying for new loans with different lenders can bring down your score. However, a commitment to making payments on time can fast track the recovery of your score. As a matter of fact, you can even increase your score without leaving any negative marks on your credit scores.

On another hand, choosing balance transfer cards could slightly affect your credit, as a result of the creditor’s inquiry. However, it shouldn’t be hard to recover from this. Generally, it is important that you know how to consolidate credit card debt without hurting your credit.

How To Consolidate Credit Card Debt Without Hurting Your Credit
Photo: bethkobliner.com

When To Consolidate Credit Card Debt That Won’t Hurt Your Credit Score.

In planning how to consolidate credit card debt without hurting your credit there are certain things to look out for. As earlier stated, it is necessary that you understand when it is right to consolidate your credit card debt. Below are certain signs that will indicate if it’s okay to consolidate your credit card:

  • In some cases, you could end up affecting your credit score by trying to consolidate your credit card debt. However, your credit report can always be increased through debt consolidation also. As long as you follow the rules of your selected debt consolidation plan, then your score will only be temporary and will increase.
  • If you do not have the luxury of time to monitor your accounts, then it is advisable you consolidate your credit card debts. It is understandable that everyone becomes very busy and caught up in different activities and there may be no time to monitor multiple credit accounts. This may either have negative effects on your credits or even make you miss out on some payments. Thus, it is a good time to consolidate your credit card debts if your schedule makes you busy to monitor your credit accounts.
  • If you are able to pay off your credit card balance. In most cases, consolidation is all about the restructuring of your debt payments and it does not lower your balance. If your income can support your debt payments, then consolidating debt, even without reducing the balance, should be enough to solve your credit problems.
  • Another appropriate time to take on debt consolidation is when you have a steady source of income. In fact, a lot of debt consolidation plans require this.

When Not To take On Credit Card Debt Consolidation

It is true that credit card consolidation has its benefits. However, it is not always appropriate in all situations. Below are certain factors that indicate when you should not consider a credit card debt consolidation:

  • In a situation where you do not understand the requirements of a new loan, do not consolidate debt. Make sure you have the right knowledge required before you go into any debt consolidation plan.
  • If you can not identify the reason why you are in debt, then do not expect a consolidation plan to resolve the source of the problem. It will only take care of few symptoms that will make you feel a little better. It is a wrong mindset to think that all is done after consolidating your debts. There is still a long way ahead before you can finally be free of your debts. It is really necessary that you figure out the root cause of your debt in the first instance. This will guide you in staying clear of future debts.

In addition, it is generally necessary that you understand the effects – good and bad – that consolidating your credit card debt will have on your finances.

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How To Consolidate Credit Card Debt Without Hurting Your Credit
Photo: Forbes.com

What Is The Best Credit Card Debt Consolidation That Will Not Affect Credit?

There are various alternatives when the issue of credit card debt consolidation comes up. It is only natural for you to prefer the option that would not only take care of your debt, but also take care of your credit score.

Debt management can really be an awesome option for you, if you do not mind having your credit account frozen for a while. One wonderful thing about this is that it doesn’t require you to borrow or shift your money from one lender to another. In fact, your monthly payments can be made bearable with the assistance of the credit counselor assigned to you. This is how to consolidate credit card debt without hurting your credit.

What Do You Do After Consolidating Credit Card Debt?

Below are few tips to keep in mind:

  • Again, it is necessary that you are able to pin down the source of your debt, in the first place. This is because failure to address the source may lead to continuous struggle with your credit issues.
  • Keep in mind that consolidating your credit card debt is only the beginning. Do not have the widespread mentality that consolidating your multiple credit card debt solves the entire problem. It does not. Do not allow the feeling of complacency take over you.

Now that you know how to consolidate credit card debt without hurting your credit, you have to create a fresh budget plan that will align with the changes you have made toward your debts. Make sure you don’t live beyond your me

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