dating man flirts Consolidating debt affect credit score

But if you transfer these balances onto a new credit card with a 0 percent APR and no balance transfer fee, and continue paying the same amount each month, you’ll pay 4 less and get out of debt in just ten months.

There are multiple options for debt consolidation (more on this in a bit), but if you stick to a well-thought-out payoff plan, a new lower-interest loan is a viable way to pay off high-interest balances in one shot. For example, one common question about the tactic is, “Does debt consolidation hurt your credit score? “The degree to which they have a negative impact depends on how many inquiries you have over a specific period of time,” says Bruce Mc Clary, spokesperson for the National Foundation for Credit Counseling.

“If you only apply for one loan and you get approved and you get that loan, that inquiry is going to have a minor impact on your credit score; barely noticeable.” He adds: “But if you’re shopping around and you apply for a loan with four or five different lenders, those four or five different inquiries are going to show up in the process, and that could have a bigger negative impact on your credit report.” According to FICO, the main credit score company in the U.

the percentage of available credit you’re using) and lower the average age of your credit history.

Those two factors — amounts owed and length of credit history — make up a huge chunk of your credit score.

This probably seems counter-intuitive, but charging a handful of monthly transactions, then paying them off in full at the end of each billing cycle, shows that you’re able to handle your credit.

A simple way to do this is to use a credit card to cover some regular monthly expenses that you’re planning on paying in full anyway — like gas, groceries or your cell phone bill.

On the flip side, debt consolidation can majorly help your credit score.

You may be able to get a consolidation loan with an interest rate lower than what you’re paying across all your separate debts, which means more of your monthly payment will go toward your principal balance.

S., how much a hard inquiry hurts a credit score varies from person to person, and such an inquiry is more likely to hurt your credit score if you have few accounts or a minimal credit history.

In other words, research your options in advance to avoid potential credit damage from applying for multiple debt consolidation loans, or ask for loan quotes based on soft credit pulls, as opposed to hard inquiries.

To get the most out of a balance transfer, pay off your balance before the promotional period ends. Credit card companies also usually charge a one-time transfer fee of up to 5 percent of the balance, so be sure to read the fine print, do the math and have a payoff plan in place before pulling the trigger.