Bad Credit Debt Consolidation is Worth Investigating

You probably think that because you have bad credit debt consolidation isn’t an option. If so, you’ll be surprised to learn this absolutely isn’t true! As the nation’s personal debt levels continue increasing at alarming rates, more and more companies are entering the business of bad credit debt consolidation.

What bad credit debt consolidation considers “bad”

Bad credit is usually defined as a FICO credit score of 580 and lower. If you don’t know your FICO score, it’s time you find out. FICO scores range from a high of 850 to a low of 300. Scores of 720 and higher are considered “excellent.” Scores lower than 720 are “good” and then depending on how low yours goes, it’s either “okay,” “low” or finally “bad.”

What’s good about FICO scores is even though they may not be excellent, they are always changing. That means, depending on future actions, it’s quite possible to improve your FICO score. Of course, your score can continually decline, making it increasingly difficult to obtain new credit. Luckily, bad credit no longer means debt consolidation is impossible.

Bad credit debt consolidation loans help even the worst situations

Bad credit debt consolidation helps make your debt more manageable and here’s how. If you use the funds from this loan to repay your unsecured debt, you’ll get those demanding creditors off your back. Plus, with your individual debts repaid, you’ll stop damaging your credit because you won’t be making any more late payments.

You might not realize this, but creditors report all late payments to the three major credit reporting bureaus. And guess what? Your FICO scores are in large part based on the information maintained by these credit bureaus.

With your individual unsecured debt obligations repaid, you’ll have just one monthly payment to manage: your bad credit debt consolidation loan. Just imagine how much easier bill-paying is going to be when you’ve just one monthly bill to pay!

And even though you might end up paying a higher rate of interest on your bad credit debt consolidation loan, it’s likely this rate will be less that the rate you’re paying on your unsecured debt. Store credit cards typically charge 18 – 22% interest. This rate jumps the minute you make a late payment or miss a payment altogether, even if that happens on a different credit account! While totally unreasonable, it’s legal for lenders to charge interest in excess of 25%! Anytime you can lower your interest rate you save money.

Better yet, when you combine bad credit debt consolidation with a strict budget, you may find you can afford to make more than the minimum monthly payment. Typically, any amount that’s paid above and beyond the minimum amount due is applied directly towards the principle balance. The quicker the principle amount is paid down, the less interest you’ll pay and the quicker your bad credit debt consolidation obligation is fulfilled!

Don’t let your bad credit put debt consolidation off any longer. Apply now!