Comprehending The True Facets Of Bill Consolidation And Credit Repair

There are many aspirant borrowers and debtors who fail to get the required assistance from the banks and the financial institutions due to the fact that they have a poor credit score. Some such debtors who are turned down while applying for a DIY debt consolidation loan choose to prefer repaying their debts through a credit card bill consolidation program. Instead of taking steps on your own, you can let the professional debt consultant negotiate with the creditors on your behalf and alter the terms and conditions of the credit card accounts in order to facilitate the repayment schedule. However, the most pertinent question here is whether or not credit repair and debt consolidation are complementary for each other. Read on to know if they are.

The essence of consolidating your debts through a consolidation program

You must be wondering what is bill consolidation after going through the above concerns. Well this refers to nothing but combining the unpaid credit card bills of a person and substituting them for a consolidated debt to a new lender who takes care of all the old debt accounts. Most debtors usually opt for bill consolidation as they feel that this is one of the best ways to repay your entire debt without tarnishing their credit score.

What is so novel about consolidating your debts?

If credit card bill consolidation only means substitution of multiple debts, then what is so novel about it? Why do most debtors take help of this option? Here are some reasons why.

  • The borrower is freed from keeping track of the multiple debt accounts and the repayment schedules and this clearly implies that debt consolidation and credit repair go hand in hand.
  • The novelty also lies in the fact that the debtor has to repay the entire debt amount in a single monthly payment to the new lender. The payments will be distributed among your creditors and this will thereby make you debt free.
  • As the debt consultant will negotiate with the borrower’s ex-lenders, they always reduce the interest rates and this can shelve a part of the overall debt and thereby lower the monthly payments.
  • The debtor can stop taking calls of the creditors as the entire transaction will be done with the debt consultant in question. You just have to inform them that you’re repaying the entire debt burden through a bill consolidation program. You can witness reduction of creditor calls .

As the repayment terms are altered, the debtor usually is able to repay the entire amount with ease. Though the decision to consolidate your debts through a bill consolidation program will initially hurt your credit score, it will start improving as soon as you start making the monthly payments on time. However, the only pitfall of credit card consolidation is when you don’t pay attention to the timely payments. If you stumble while making the payments towards the bill consolidation program, this will detrimentally impact your credit score and may mar your financial prospects in the near future.

Bill consolidation and credit repair always goes hand in hand. You just have to make sure that you don’t take this debt relief option as the ultimate panacea to your financial woes. Have a plan while consolidating your debts and make timely payments.

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