Financial Resource

If you are deeply in debt, you might be torn between declaring bankruptcy and the process of consolidating debt. It is important to understand the potential impact of either action on your credit.

A bankruptcy filing can stay on your report for many years. Bankruptcy can make it very difficult to rebuild your credit score. Consolidating debt, on the other hand, often will not hurt your credit score to the same extent.

Hector Milla Editor of the “Best Debt Consolidation Services” website — http://www.BestDebtConsolidationServices.net — pointed out;

“…If you are considering using the process of debt consolidation and a consolidation loan, there will most likely be some negative credit reports as you go through the process of applying for a new line of credit and begin to close old accounts. Over the long run, though, you should find that consistent payment on the new line of credit would begin to raise your credit score…”

Perhaps the best way to determine the impact that consolidating debt will have on your credit, is to work with a debt consolidation company or agency.

Before you start looking for a debt consolidation service, however, you must know the actual condition of your finances. How much unsecured debt (personal debt, credit cards, medical bills, etc.) do you owe? Generally, you must be a minimum of ,500 in debt in order for a debt consolidation to be able to help you.

You must have a budget that states your income, your monthly expenses and the amount you have available to pay down this unsecured debt. You now have a starting point to begin talking with companies and agencies that specialize in consolidating debt.

The best ways to work with these companies and agencies includes:

• Checking their reputation with the Better Business Bureau,
• Having financial information available at the start of any conversation,
• Being honest with them about your situation,
• Listening carefully to their representatives, and
• Asking questions and taking notes

“…If the effect that consolidating debt could have on your credit score is an important item for you, be sure to ask the individuals they think the impact could be. Agencies and companies involved in this area of finance have years of experience behind them in helping consumers solve their problems. Use their experience to your advantage. If your finances are in disarray and you are considering consolidating your debts, the best advice is simply to do something positive and do it now. Understand that at the start of the process there may be some negative report, but overall, there could be an improvement in your credit score…” H. Milla added.

Further information about trusted and reputable companies for debt consolidation by visiting; http://www.BestDebtConsolidationServices.net

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