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07-Jan-2017 07:20

However, if you think you might be tempted to continue racking up credit card purchases after doing debt consolidation, then you have to make a harder decision.If you can find a debt consolidation loan that will help you pay off your debt through lower interest rates or lower monthly payments then you should probably do it – and close your old credit cards despite the potential negative impact on your credit score.But of course, before you can decide if it’s the right choice you have to answer some important questions.One of the most important is, “does debt consolidation hurt your credit score?And for further reading, check out our article, “Is Debt Consolidation a Good Idea?Discover Card is serious about safeguarding your personal information online.A bigger concern than the hard credit inquiry is how the debt consolidation might affect your credit utilization.The phrase “credit utilization” simply means the percentage of your available credit that you are currently using.

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You also still have your old cards (with a total credit limit of ,000), so your total credit limit is now ,000 and your credit utilization is 15%.Also included in your report is a history of the payments you’ve made on time, and those you have paid late (or not paid).The 3 major credit bureaus (Equifax, Experian, and Trans Union) compile this information and make it available, along with your credit score, to lenders who want to find out how creditworthy you are.After all, paying off your debt will help improve your credit score in the long run and save you plenty of money in interest and fees!——— Hopefully the information above is helpful not only in answering the question “does debt consolidation hurt your credit score?

You also still have your old cards (with a total credit limit of ,000), so your total credit limit is now ,000 and your credit utilization is 15%.Also included in your report is a history of the payments you’ve made on time, and those you have paid late (or not paid).The 3 major credit bureaus (Equifax, Experian, and Trans Union) compile this information and make it available, along with your credit score, to lenders who want to find out how creditworthy you are.After all, paying off your debt will help improve your credit score in the long run and save you plenty of money in interest and fees!——— Hopefully the information above is helpful not only in answering the question “does debt consolidation hurt your credit score?This is why it’s important to know yourself and be realistic about your future behavior.