Consolidating your bills

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One of the first things you’ll want to do is check your credit reports for accuracy.

An error on any of your credit reports could prevent you from qualifying for the debt consolidation help you need, so .

Credit card debt consolidation may save you money, but it’s often not free.

Credit cards may have a balance transfer fee, so you’ll want to make sure that cost doesn’t outweigh the potential benefit of getting a lower interest rate on your debt.

(Not every creditor has to participate, so you may be able to keep a credit card out of the debt management plan if you need it to remain open for travel or business purposes, for example.)Once you complete your plan, some of your creditors may re-establish your credit based on your new, debt-free status and the on-time payment history you established through the course of the debt management plan.

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 should improve as your remaining balance shrinks from where it started). Adding a personal loan to your credit history can improve your mix of accounts (it’s good to have a combination of installment and revolving credit, like credit cards).

That way you can look forward to a brighter financial future.

Failing to pay a personal loan as agreed will hurt your credit, so stay on top of your loan payments and work to Credit card consolidation can affect your credit in many ways, depending on which strategy you choose.

For example, if you’re consolidating multiple balances onto one card, you’ll want to avoid maxing out that card’s credit limit, because that will hurt your credit utilization rate (how much debt you’re carrying compared to your total credit limit).

Then you’ll only have one monthly payment: the loan, the credit card or the debt management plan.

Not only does that simplify your debt payments, it can also help you save money.

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