Debt Consolidation Richmond Va – Get Out Of Debt With A Good Credit Score
Debt Consolidation Richmond Va – How to Choose
Get Out Of Debt With A Good Credit Score
Do you want to get out of debt with a good credit score? Do you think that is even possible? Of course it is!
The best way that you can keep your credit score high as you try to solve your debt situation is through debt consolidation. There are two options that can help you consolidate your debts. Both will give you a single low monthly payment plan that stretches over a longer period. As you commit to the process of either program, you can improve your score even further.
Let us discuss them one by one.
The first is known as a debt consolidation loan. You will apply for a low interest rate loan that is significant enough to pay for all of your debts. You want to use this loan amount to completely pay off the other credit accounts that you owe. That will help eliminate the high interest credit card debts that you have. Personal loans and secured loans are usually given with a lower interest rate. So that will make your monthly payments even lower. This type of debt consolidation will dip your score slightly because of the credit inquiry of the lender when they are trying to determine your creditworthiness. But after that, you can expect that your credit score will go up as you make timely payments on this loan.
The second option is debt management. It actually begins with credit counseling wherein a credit counselor will analyze your unique financial and debt situation. They will determine if you can qualify for debt management. If you have the right qualifications, you will be asked to enroll in the program. When you accept, you and the counselor will create a debt management plan that contains your proposal for a lower monthly payment plan. There is no debt reduction here. You will be re-distributing your debts over a longer payment term and that makes the lower payments possible. Once the plan is complete, the counselor will send a copy to your creditors and you have to wait for their approval. Once they approve, you can make a single monthly payment to your counselor. They will take charge of disbursing that amount to your various credit accounts.
The reason why debt consolidation will not lower your credit score is because you will still end up paying for all of the debt you owe. Also, the one monthly payment scheme makes it easier for you to monitor your debts. The chances of you being late on payments should be very slim. Since you will not be spending a lot of time tracking your payments, you can divert your concentration on growing your debt payment fund. That way, you can get out of debt a lot faster.
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