Improving Your Credit Score Through Debt Consolidation
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In continuing the discussion of strategies to personally repair your credit score and credit report, it is wise to keep debt consolidation in the discussion.
Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others. The reason why this method can be so effective is because if you have high balances on your credit cards and other revolving debt, consolidating these items into a new loan will allow you to pay off the revolving accounts and lower your debt utilization - both implications can mean a huge credit jump for you. |
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Another good reason to consider debt consolidation is that it allows you to pay off items that may be delinquent or in collections. Once you've paid them off, you can apply the tactics mentioned in the previous strategy lesson to remove those negative marks from your credit profile, thus further enhancing your score and profile.
Debt Consolidation Options
The Lending Club is one of the best sources for Debt Consolidation and Business Lending. They are a crowd funding company that bring together dozens or even hundreds of investors in aggregate to put up money that will be distributed to applicants that meet the credit standards. The investors then receive a return on their money when the borrowers begin repaying the loan.
The Lending Club is a great resource for debt consolidation loans because they base a lot of their decision on the character of the applicant and look at the full picture rather than just approve or deny someone based on their credit score and report. Moreover, potential investors that decide to put forth money also get to reach out to applicants to learn more about them and to help sway their decision to fund your loan request.
The application form is pretty simple and straight to the point and you will usually receive a decision within a few business days if not sooner. So, if you have high credit utilization, high balance revolving credit lines, or accounts in collections, a debt consolidation loan with the Lending Club may be a great way for you to pay off those debts all while significantly improving your credit score.
Another option would be to apply for a loan at your bank. These are usually a bit harder to qualify for, but if you already have a great relationship with your bank, have no major bank related issues, and have a decent credit score, this option may be suitable for you. Not to mention that if you bank at a credit union, you can expect lower interest rates compared to other available loans.
The Lending Club is a great resource for debt consolidation loans because they base a lot of their decision on the character of the applicant and look at the full picture rather than just approve or deny someone based on their credit score and report. Moreover, potential investors that decide to put forth money also get to reach out to applicants to learn more about them and to help sway their decision to fund your loan request.
The application form is pretty simple and straight to the point and you will usually receive a decision within a few business days if not sooner. So, if you have high credit utilization, high balance revolving credit lines, or accounts in collections, a debt consolidation loan with the Lending Club may be a great way for you to pay off those debts all while significantly improving your credit score.
Another option would be to apply for a loan at your bank. These are usually a bit harder to qualify for, but if you already have a great relationship with your bank, have no major bank related issues, and have a decent credit score, this option may be suitable for you. Not to mention that if you bank at a credit union, you can expect lower interest rates compared to other available loans.
