Does consolidating credit card debt affect your credit score
Long term this will mean a savings of tens, if not hundreds of thousands of dollars.
Especially when your debt to income means you are not going to be getting approved for credit – even with a high credit score.Each one of them affects your credit score and credit report in different ways.Even slugging it out month to month to pay your bills on time in today’s risk adverse lending environment – where your debt to income is going to prevent access to new credit – amounts to much the same as the debt relief solutions outlined above.I expect there to be student loan underwriting changes in the coming years as well. If you are on this web site and reading through the debt relief program, it likely means you are in an emergency situation with your debt, or you recognize you soon will be.The three options for debt resolution outlined above may be what you have to consider in order to put yourself back on track financially.This has led to a reduction in lending because more attention is being given to lending criteria other than your Vantage and FICO credit scores.
This means that you’re DTI (Debt to Income ratio), if unhealthy, will prevent you from getting approved for new credit, even if your credit score is excellent.
What may surprise you is that all of these methods for resolving debt track fairly closely with the other when it comes to being able to access new credit products.
Hopefully you are now better prepared to understand that when you are struggling with debts you can no longer afford, but are more concerned with your credit score, your attention is on the wrong thing.
If you have a good score and healthy looking credit report, and are in the market for a loan, you are using your credit history and credit rating utility function.
The better your credit rating, the lower the costs you will pay for making purchases using credit.
See the video below to better understand the affect on your credit score by different debt relief solutions, plans, or programs.