Credit Card Debt Consolidation Services: What Happens When You Seek It?Debt Management, Discussion | May 10, 2010 at 3:35 am
It drops considerably, right? Due to this conception most of us don’t approach credit card debt consolidation services, and continue to struggle with repayment of debts.
There is a variety of options available to an individual to repay his debts. However, because we aren’t aware about them, we don’t use it. And what about the ones we are aware about? We don’t use them because we have some weird misconceptions. Most people believe seeking help from credit card debt consolidation services would ruin our credit scores. This may happen only if you aren’t aware how debt consolidation works, or how credit score is derived.
If you utilize your credit balance up to the limit, your score would definitely fall. They, the credit bureau, assume you need more credit to make ends meet. A credit card debt consolidation company works to reduce this balance, by paying off a bit every month. So, it actually helps you to improve your score, not reduce it. However, try to understand it takes time to heal a deep wound. Be patient.
One of the other important reasons that influences your credit score is the length of an account held by you. If you have many old accounts, it actually helps to improve your score, as it grants you more credit. Many people believe credit card debt consolidation services companies work on closing old account.
Probably there is a miscommunication, or you went to a wrong place. People in those companies are financial advisors with years of experience working in this area. If they wouldn’t know the right ways to get things solved, who would know it. They help you to keep the old accounts open by repaying the balances gradually.
Credit Card Debt Consolidation services companies are in constant touch with credit bureaus, and they report your case as well. However, instead of reporting your inability, they report your progress. It definitely reduces your score for a while. In long term, though, it’s one of the best ways to get your score back on the right path.