Does consolidating debt hurt your credit score
If you’re not sure how consolidating your credit card debt will affect your score, take a look at the details below – the Nerds will tell you everything you need to know!
Rolling multiple credit card debts into a single consolidation loan has a lot of important benefits.
In fact, to credit agencies, paying off several accounts with the consolidation loan makes it seem as if you have paid off accounts.
The debt consolidation loan appears as a new credit account, but accounts paid in full are always positive.
As of July 2014, the average credit card interest rate is hovering around 15%.
If you’re carrying debt on several cards with this interest rate, you might be shelling out hundreds every month in interest.
It is very important that you are fully committed to a debt consolidation program.
There are a lot of benefits to this move, including the potential to give your credit score a boost.Closing credit card accounts lowers your amount of available credit, thereby changing your debt to limit ratio.If you must close certain credit accounts, close only the most recently opened.She earned her Bachelor of Science degree in marketing and multinational business from Florida State University and a Master of Business Administration from Nova Southeastern University.