Does consolidating credit card debt hurt your credit

02 Nov

These are not quick fixes, but rather long-term financial strategies to help you get out of debt.When done correctly, debt consolidation can: There are several ways to consolidate debt, depending on how much you owe.Myth: Debt consolidation saves interest, and there’s one smaller payment.Truth: Debt consolidation is dangerous because it only treats the symptom.They also probably haven’t saved for all of the “unexpected events,” which will eventually become debt too.In other words, the good money habits for staying out of debt and building wealth aren’t there—their behavior hasn’t changed—so it’s extremely likely they will go right back into debt.

does consolidating credit card debt hurt your credit-39does consolidating credit card debt hurt your credit-37does consolidating credit card debt hurt your credit-69

Getting out of debt isn’t quick or easy, but it’s the first step to achieving lasting financial health. It simply means you’re taking out one loan to pay off a bunch of loans—or consolidating the debt to one payment.

Committing a portion of every salary increase to paying down credit cards and personal loans is the obvious solution, but it isn’t the only option.

Refinancing debt is also a smart strategy, especially for those in the post-grad plateau— the early stages of a promising career—with plenty of raises just around the corner.

While getting out of debt can be life changing, you need to consider how a debt consolidation loan will affect your credit rating. We’ll go over all of these questions below so that you can be as equipped as possible to finally tackle your debts.

The debt consolidation loan is probably the most popular form of debt consolidation.