Consolidating credit debt reginae and diggy dating
There will be a drop initially due to closing all but one of your credit card accounts. HOW IT WORKS: First, you must fill out an application and be approved for a loan.Your income and expenses are part of the decision, but credit score is usually the deciding factor.The traditional form of credit consolidation is to take out one large loan and use it to pay off several credit card debts.Because you now only have one loan, a debt consolidation loan, you have one monthly payment, which simplifies the bill-paying process. Lenders rely heavily on your credit score as a signal that you will repay the loan.“Credit Counseling will develop an action plan that is tailored to your exact needs,” Rebecca Steele, Chief Executive Officer for the , said.
You open an escrow account and make monthly payments (set by National Debt Relief) to that account instead of to your creditors. CREDIT SCORE IMPACT: It’s a huge negative and it lasts for seven years.
When the balance has reached a sufficient level, NDR negotiates with your individual creditors in an attempt to get them to accept less than what is owed. Expect your credit score to drop 75-125 points as your bills go unpaid and accounts become delinquent.
If a settlement is reached, the debt is paid from the escrow account. In Charge (nonprofit debt consolidation), Avant (debt consolidation loan) and National Debt Relief (debt settlement) each represent different segments of the debt consolidation industry.
Debt consolidation works when the interest rate and monthly payment on your credit card debt is reduced by combining all your bills into a single payment.
Another way to consolidate high-interest debt is to have an agency negotiate a settlement with the card companies for less than what is owed.