How will consolidation affect my credit rating?

Consolidation is the only debt management solution you can carry out which will not effect your credit rating.

This is because consolidation does not involve reducing or missing any of your agreed creditor payments.

If you consolidate your debt with a single loan, your smaller creditors will be paid off in full. Your accounts will not be in default and no problems will be recorded against your credit file.

You will need to have a good credit rating to be able to consolidate your debt. Before you apply you should check your credit report. You can get a free credit report here.

To find out more continue reading below...

Wouldn’t my credit rating be affected anyway?

The only way your credit rating will be effected is if you try to reduce or miss completely your monthly payments.

As such, simply consolidating your debt before you have missed any payments will mean your credit rating is not affected.

If you are already struggling with debt and have missed payments to your creditors, your credit rating may well already be damaged. However, further problems will not be created if you pay off or settle any of your outstanding account using a consolidation loan.

WHERE TO START

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Find out which solution is likely to be best for you by using our debt analyser, which you will find in the left and right hand columns of this website.

It is free to use and, as well as a detailed report on your best options, you will receive a copy of the eBook ‘IVA & Bankruptcy’ by James Falla.

If you have questions, just ask!

We have debt experts on hand to answer your questions with unbiased, accurate advice that is best for you, not your creditors.

You can ask your questions in our debt forum or by traditional email, whichever you prefer.

Our debt experts have written books and almost 2500 articles on the issues surrounding personal debt in the UK.

You can search our articles here to find more information on your individual circumstances.

* you get this book free (ebook version) if you use our debt analyser

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Improving your credit rating

If you believe that your credit rating is already poor or you have been refused credit and do not know why, have a look at the Beat My Debt Improving Your Credit Rating guide. This guide will help you understand why you have a problem and what you can do to improve your credit rating.

The guide can be accessed in the 'Related Links' box above.