Debt Consolidation service, does this damage or help your credit? Well, the answer can be tricky; if you really want to have an answer then it does damage your credit in the short run. What do you mean by short run? By short run, I meant that the damage is temporary as in the long run debt consolidation service rebuilds and further improves your credit score. Are you one of those who fear the initial damage done to your credit score by the debt consolidation service? Well then let me tell you that if you take no action, then that is your worst action because when you are in a negative debt related condition then no action can only result in a much poorer financial condition.
What if you rebuild your payments into a single monthly expense? Well, that will result in you becoming debt free and focusing in your financial priorities but only for a short period. Will this effort not improve your financial standing? It will, but it will also improve your chances of being the best applicant for even bigger lines of credit. Then tell me what is basically done in Debt Consolidation service? When you enroll in it, you get a slum sum amount of money to pay of your lenders simultaneously. What does it do to my credit score? It is lowered by the reported agencies due to the shortening of lines of credit in a short span of time.
So what is the advantage of debt consolidation service? Its advantage is that when you make regular on time monthly payments you get to recover your credit score, which got damaged by the initial blow. What if I stop paying the monthly payments for some months? Then, your credit score is going to decline anyway. So the damage done to your credit score by the initial blow of the Debt Consolidation service is nothing? Yes it is nothing as compared to the damage done by your lack of monthly payments. What if I stack up the monthly payments and pay them in a month? Well, not even you can provide yourself guarantee that you will be able to afford that.
So what after your credit score has dealt with the negative initial blow? After that, with the help of your debt consolidation service you will be able to reconstruct your credit score. Is that all? No, you will be also made an ideal option for the creditors willing enough to open new lines to consumer credit. What will be result of your on time monthly payments to the debt consolidation agency? The result of it will be the positive credit report. How will the positive credit report help you? It will help you by providing positive credit activity. Then how exactly positive activity will help you? It will help you by improving your credit score bringing it back up to the mark from the negative damage and further improving it.
