Dear LSM: A liquidated account remains on your credit report for seven years from its original delinquency date. If you paid off the debt five years ago, it's almost certain that there's some time left before the seven-year period is reached. Your credit report represents the history of how you managed your accounts. Even if your interest rate drops during consolidation, you could still pay more interest over the life of the new loan.
When you consolidate a debt, the repayment period starts from day one and can be extended to seven years. Your total monthly payment may be lower than you're used to, but interest will accrue over a longer period of time. Paying off multiple credit cards with a debt consolidation loan isn't an excuse to increase balances again and can lead to more significant financial problems in the future. Consolidating your debt can have a number of advantages, such as faster and more simplified repayment and lower interest payments.
Similarly, paying off credit cards and other lines of credit with a debt consolidation loan can create the illusion of having more money than you actually have. You can also think twice about debt consolidation if you haven't addressed the underlying issues that caused your current debts, such as overspending. However, positive information, such as the loans you have paid on a daily basis, will remain on your credit report for much longer than 10 years. Debt consolidation is the process of paying off several debts with a new loan or credit card with balance transfer, often at a lower interest rate.
If your credit rating has improved since you took out other loans, you may be able to lower your overall interest rate by consolidating debts, even if you have mostly low-interest loans. While it's possible to settle your debt and remove it from your credit report, it's a risky venture. Your best option is to contact a professional (while keeping an eye out for scams) to secure your financial future and pay off your debt in a professional manner. And, if you're working toward a debt-free lifestyle, you'll have a better idea of when all your debts will be paid off.
Doing so can save you money over the life of the loan, especially if you don't consolidate it with a long-term loan. Between credit cards, student loans and car loans, it can be difficult to keep track of payments and balances of outstanding debts. Debt consolidation can be a wise financial decision under the right circumstances, but it's not always the best option. This is one of the main reasons why you should turn to a professional debt settlement company instead of trying to do it yourself.
In addition, if you are tempted to accumulate balance on your credit cards again, this may not be a good idea, since you will soon find yourself in the same place where you started, but this time with more debt.
Leave Message