Friday, September 27, 2013

Americans Are In A Lot Of Debt!

By Rob Wen

There is a plethora of people that are facing crushing debt and yet they are too scared to act on it because they think that they may never get out of the situation. Ironically, it's this very sloth of motion that propels them further and further downward. They avoid consolidating their debt because of a fear that it will look bad on future credit reports. Debt consolidation does come with a few hits on your credit report, but the benefits far outweigh the temporary dings.Just by learning a little bit about debt consolidation, you can avoid the most common pitfalls.

There are people out there that want nothing more than for you to give them your money. Sometimes they have outrageous terms in the fine print, and sometimes they just take your money and run.Luckily, for everyone that is just trying to rip you off, there are several legitimate, honest agencies that are willing to work with you for a reasonable rate. Do some research around the internet to find out what agencies are good, and make sure you understand all of the implications before you put your name on that dotted line.

It's generally a good idea to join a loan consolidation program to help negotiate. You'll find that on your own, you have barely any effect. The consolidation agencies will work with you and your creditors at the same time to work out a better rate. Make sure the agency you choose has a good reputation, because they will know to watch for common work arounds and loopholes that you wouldn't know to avoid.

If you are considering consolidating, make sure that you actually have enough of a debt for it to pay off. If you have a lower amount of debt, you might actually end up spending more by consolidating than you would just paying it down. You could also ask about equity lines at your bank if you want the convenience of only paying one bill each month.

This is normal, and happens any time you close an account. The nature of a consolidation loan helps to combat this though, as they provide constant positive feedback to your credit just as the prior negative feedback streams are removed. Your score will increase just by paying down your consolidation loan.

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