The answer to this question is a definite
“maybe.” The fact is, only you can determine
whether debt consolidation will help your credit, and
you’ll base that decision on your current financial
status.
Start this process by keeping in mind those things
that do help your credit. Regular monthly payments that
are consistently on time are among the best things you
can do for your credit. With that in mind, the next
step is to evaluate what effect your current actions
have regarding outstanding debt.
Each time you send in a credit card, mortgage or other
payment late, that’s noted on the account. If
you’re constantly sending in your payments even
a few days late, you’re doing some real damage
to your credit report. If this sounds like you, it’s
time to take some positive action.
But life isn’t always easy and everyone encounters
a problem making timely payments now and then. That’s
true, but it’s up to you to take steps toward
protecting your credit when life throws you a curve.
Our natural instinct is to dodge those creditors when
they call. Rule number one – Don’t! Not
only should you answer the phone or return the call,
you should actually make the call first.
If you realize that you’re not going to be able
to make your payment on time, call the creditor and
let them know. They might offer you a brief forbearance
or make some other arrangements that will keep the late
payment from making a mark on your credit. In the case
of a loan, you might be given the option to pay only
the interest due this month with the balance of the
payment tacked onto the back of the loan. Similar arrangements
can often be made with many creditors.
One problem some people face is that they’ve
gotten themselves tied to several small payments. Adding
another payment of only $40 per month didn’t seem
like it’d be a strain on your budget – but
the third, fourth and fifth payments (even though they’re
all small) have added up to a serious problem.
Either of these situations and many more can be the
catalyst behind your decision to do some debt consolidation.
There’s no doubt that a debt consolidation loan
can lift the strain of being behind or simply facing
too many smaller monthly payments.
It only takes a minute to start the process. And one
of the best benefits of debt consolidation is that you’ve
now got the opportunity to make payments on this new
loan on time, every time. |
