How to Consolidate Credit Card Debt without Affecting Your Credit
When you are looking to consolidate credit card debt, bear in mind that some options will have an impact on your credit score. The key to quality credit card debt control is identified in implementing measures that will not have long-term negative consequences on your score.
Whether you choose to consolidate credit card debt on your own or you choose to work with a debt consolidation company, it is possible for you to retain a good credit score and control your debts simultaneously. If you opt for the latter and choose a company to work with, make your intentions clear; tell the debt control specialists that you want to keep your current credit score intact so that they can offer you debt relief methods that will not jeopardize your credit score.
The most obvious method for keeping your credit score in good condition is to make your credit card payments in a timely fashion. You need to be a responsible spender and a responsible bill payer, and if you at least make the minimum payment every month, you are protecting your credit score. However, if you feel that there is the slightest chance of falling behind on any payments, you should make immediate changes in your situation. It is often beneficial to get in touch with your credit card provider to let them know that you are facing financial difficulties. If you have an insured credit card, the coverage may help you out, and if you do not have an insured credit card, you can talk to the provider about a potential settlement before your payments lapse: this insures getting a quality deal. In some instances, you may not be able to get any kind of settlement deal until your payments have lapsed. Once you miss a single payment, enter into settlement negotiations immediately.
Some consumers decide to move all their balances to a new credit card that offers a better deal (such as zero balance transfer, lower introductory rates) than what they are getting on other credit cards. This has to be done before they fall behind their monthly credit card payments so they will not have to worry about negative marks on credit report. However keep in mind that this option is only good if the new card that these consumers take the advantage of is really offering a better deal. Most of the zero balance transfer offers promise low introductory rates for a short period of time and then increase the normal interest rates substantially. So consumers need to find out how long the introductory rate will last and how much the normal interest is. Be sure to read the full terms and conditions to make sure there are no hidden fees involved with these zero balance transfer offers.
If consumers choose to take a personal loan, a home equity loan, or a debt consolidation loan, the minute they receive the funds they need to start making payments. Do not let your credit card bills lapse for several months because this can have a long term, damaging effect on your credit score. If you are working with a company who is helping you to consolidate credit card debt, speak with the professional to see how and when they will send payment to your creditors immediately upon approving the loan. Make sure payments will be made for you as promptly as possible and that the company will ensure that your credit reports are updated with the most recent information about your paid accounts.
Once your accounts are cleared up, make sure you keep at least a few of them open. It is not recommended closing the credit card accounts that you have had for the longest time since these cards work on establishing a solid credit history. Bear in mind that while you are attempting to consolidate credit card debt, the minute you close your account your credit score is affected for the short term. In addition, opening new accounts also reduces your credit score: keep the number of accounts you open and close to a minimum.
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