A credit counseling agency will typically work within your budget to come up with an affordable monthly payment for all your unsecured debt. The credit counseling agency will put you on a debt management plan (DMP) that usually includes a lower minimum payment for each of your creditors and a lower interest rate. Credit counseling with a DMP usually takes about three to five years, depending on how much debt you have.
VantageScore®, another credit scoring model which was developed by the three main credit bureaus (Experian, TransUnion and Equifax), also uses a scale ranging from 300 to 850. But its definitions associated with each score range vary slightly. A VantageScore from 601 to 660 is considered fair, from 500 to 600 is poor, and from 300 to 499 is very poor. See the table below for a full breakdown.
With poor credit, you may not be able to get approved for new credit products like credit cards. Although you may still be able to take out an auto loan or a mortgage, you’ll pay a much higher interest rate because of your low credit score. Compared to a borrower with good credit, someone with poor credit can pay $50,000 more in interest on a mortgage. Over an entire lifetime, you could end up paying over $200,000 more in unnecessary interest just because of bad credit.
The Fair Credit Reporting Act lets you get one free credit report every year from each of the three major credit reporting bureaus, which are Equifax, Experian and TransUnion. If you rotate through the bureaus, that means you can get a free credit report once every four months, ensuring you’re aware of any issues or problems that need to be dealt with in a timely manner.
The downside to debt consolidation is that it can fool you and promote unhealthy financial habits. When people consolidate their debts, they often feel really good about themselves and their finances. They’re pleased that they’ve taken action on their debt. They know they’ve made a smart move by reducing the interest they’re paying, and their finances are so much easier to manage with one monthly payment. Many times this monthly payment is lower than their previous payments, so now they’ve got extra breathing room in their finances and a little more money to spend. Life now seems so much easier.
These two companies work for you so that you can keep Murphy’s law at bay. Both ExtraLend and LoanSolo can provide the best personal loans online for you, check them out and see what you can do with a little help. Even if with all the options of personal loans no credit check, you can count on these two companies to have your back when Murphy comes knocking.
If you do decide to get a credit card consolidation loan, a credit card consolidation calculator is often a good option that can help you assess the type of benefit that you’ll receive. If you want to make sure that you’re getting a solid deal, you can use a debt consolidation calculator to get a rough estimate of how much you could save. Many calculators will allow you to input debt amount, interest rate, fees, charges, and other important information. You’ll want to make sure that you use a calculator that includes as many components as possible. Try a few to get a better idea of the real value of the loan.