Dealing with debt is hard enough, but it becomes much more difficult if you have a less than ideal credit score. You may have heard that debt consolidation isn’t an option for those with poor credit, but this isn’t always true. If you’re interested in consolidating your debts, you’ll need to look at all available options and how they could affect your credit in the long run.
How Your Credit Score Affects Debt Consolidation
Your credit score is a major factor when lenders decide whether or not to give you a loan or extend other forms of credit. Generally, a person with a high score is seen as someone who is likely to pay back their debt on time and in full, whereas lenders may perceive those with lower scores as less reliable. Of course, this isn’t always the case - plenty of outside factors, like the amount of debt you carry and the types of credit you use, can cause your credit score to take a hit.
Options for Those With Poor Credit
Having good credit can make debt consolidation simpler, but you still have options if your score is less than perfect. There are generally three common ways to consolidate credit:
- Opening a new credit card and transferring your balances
- Taking out a debt consolidation loan
- Receiving a customized consolidation program through a debt relief company
While there are credit card and consolidation loan options designed for people with bad credit, it’s important to proceed with caution. You may wind up with a new credit card or loan that has less favorable terms than what you currently have, such as higher interest rates.
Consulting with a debt relief company to consolidate your debts may be your best option - in addition to having support from a professional debt relief team, most debt relief teams can customize a program to fit your unique financial situation.
Will Consolidation Hurt My Credit?
No matter where your credit is to begin with, debt consolidation may have an effect on your credit rating. It’s not uncommon for your credit score to dip down when starting a consolidation program. This would be concerning for anyone, but can be especially scary if you already have poor credit. Fortunately, the initial drop in your credit score can, and should recover over time as you implement and maintain good financial habits.
Consolidation through Accredited Debt Relief
Accredited Debt Relief has been providing debt consolidation services to individuals with varying credit scores across the U.S. since 2011. With our A+ rating from the BBB, you can be sure that you’re receiving helpful, honest advice from debt relief specialists. We’re ready to help you find the consolidation program that works best for you, just like we’ve done for customers in the past. Contact us today for your free consultation.