How does debt consolidation help ones credit repair?
Debt consolidation loans consolidates multiple lines into one new loan or debt consolidation program – it typically involves a debt consolidation loan, but could also be referred to as a credit counseling program or other forms of debt resolution that do not involve a new loan. It is important that you know what your options are and what your goals are before choosing a debt consolidation program or company. When you consolidate your debt, the FICO recalculates your lending risk for the current period. It may adversely affect your credit rating for a short period. Anyway your score should also go up in the long run because most debt management programs teach you fiscal tips that will help you develop healthy money management habits. You will hopefully learn to consistently make on-time payments as well as keep your credit balances down to a manageable level. All of this will push your credit score upward over time. Source :
