Consolidating credit card debt impact credit score karylle dating
They require you to get a loan from a bank, credit union, or peer-to-peer lender who will agree to consolidate some or all of your debts (usually credit card balances) into one new loan.
If the interest rate on this new personal loan is lower than the interest rates on the different credit cards that you are consolidating, you'll save money.
If you use a debt consolidation loan to pay off credit card balances and those cards remain open, your credit utilization should drop significantly, which could have a very positive effect on your credit score.
It’s a substantially less significant factor, but most credit scoring models have some form of “credit mix” category.
The older the age of your open credit accounts, the better.
If you end up closing your credit card accounts as a result of using a debt consolidation loan, that could lower the age of your accounts (replacing multiple old accounts with one new account) and drop your score slightly.
Peer-to-peer lending, otherwise known as P2P, is a different way of borrowing money that does not use the services of a traditional bank or credit union.Basically, having (and successfully maintaining) a variety of credit types is beneficial.So adding a new type (like an unsecured personal debt consolidation loan) could potentially boost your credit – just not a ton.No matter how you decide to handle your debt, it’s likely to have a significant impact on your credit.So what happens to your credit if you consolidate your debt with a debt consolidation loan?