75942 days on xHamster
81619M profile views
90321K subscribers
5369 comments left

Does consolidating credit card debt hurt credit score

Particularly if you have good credit, you may be able to qualify for a lower-rate loan.

Even if you don’t have great credit, there are other routes to consider. Todd Huettner, a personal finance expert who runs Huettner Capital, a residential mortgage lender in Denver, says before consolidating, you may want to figure out why you wound up with the debt.

Banks, credit unions and online lenders offer these options to consumers.

Pros: The interest rate on home and auto loans may be lower than on credit cards, partially because they’re secured loans.

Also, “some of these companies will require that you close your credit cards once you pay them off,” says Maggie Germano, founder of a financial coaching service in Washington, D. Closing accounts isn’t always bad, but it could hurt your credit.

With a loan from a qualified plan, such as a qualified 401(k), you may avoid paying an early withdrawal penalty in a few different circumstances.

Cons: You lower your retirement savings, and you may have to pay income taxes and an early withdrawal penalty if you’re younger than 59 ½.

Also, you can usually only borrow up to 50 percent of your account balance (up to ,000), and you must pay back the money within five years unless you’re using it to buy a home that will be your principal residence. Eric Klein, an attorney with the Klein Law Group in South Florida recommends, “Never, ever use your qualified money (401(k), IRA, pension, etc.) to consolidate credit card debt.” In addition to the reasons above, he explains that your qualified money could be protected from creditors if it’s in a retirement account.

You may be able to take money out of your home or vehicle by using a cash-out refinance or a HELOC.

You’re also taking on secured debt in exchange for paying off your unsecured credit card debt.

Please or register to post comments
If spammers comment on your content, only you can see and manage such comments Delete all
Two alternate options. If you're unable to get rid of your debts by adhering to an aggressive payment schedule, getting a debt consolidation loan or using a credit counseling service, you'll have two principal debt-relief options debt settlement and bankruptcy. Both of these methods of debt relief will affect your credit score. 
05-Sep-2018 04:54
Mar 10, 2017. Other ways credit card consolidation can hurt your credit Applying for a new line of credit results in a hard inquiry on your credit report, adding a new credit account can lower the average age of your credit history and a new personal loan will show that you have a high level of outstanding debt your scores. 
05-Sep-2018 04:57
Mar 25, 2016. Debt consolidation that can work; Debt consolidation and debt management programs to avoid; The risks of consolidation. That ratio can have a big, negative impact on your credit score. By paying off credit. The best way to improve your credit score is to eliminate your credit card debt burden completely. 
05-Sep-2018 05:00

Does consolidating credit card debt hurt credit score introduction

Does consolidating credit card debt hurt credit score

Recent posts

05-Sep-2018 07:38
05-Sep-2018 15:26
05-Sep-2018 20:03