Posts Tagged ‘debt consolidation’

Your Credit Score And A Low Interest Debt Consolidation Loan

Friday, September 14th, 2007


Introduction

If you are wondering whether or not a low interest debt
consolidation loan is right for you, you likely have a number of
questions. In this regard, you may be wondering how and why
your credit score might effect your overall ability to obtain a
low interest debt consolidation loan.

 

Through this article, you are provided with an informational
overview of the role your credit score plays when it comes to
applying and qualifying for a low interest debt consolidation
loan. By considering this information, you will be in a better
position to determine whether or not it will be worth your while
to make application for a low interest debt consolidation loan
at this point in time.

How Your Credit Score Works

You credit score -- or FICO score as it is called from time to
time -- is computed based upon your credit history. In point of
fact, the specific manner in which your credit score is
determined is a proprietary secret of the Fair Issac and
Company, the entity that worked with the three major credit
reporting agencies to develop the credit or FICO score system in
the first instance.

It is generally appropriate to consider your credit score as
being something akin to a grade based on the manner in which
you've used credit and dealt with your debt in the past. Of
course, this is a simplistic explanation about how your credit
score works =85 but, it is also an accurate way of explaining the
way the credit or FICO score does work.

How Your Credit Score Will Impact Your Low Interest Debt
Consolidation Loan Eligibility

If you credit score dips too low, you no longer will be able to
obtain a low interest debt consolidation loan. In fact, your
credit score really does need to be in the good to excellent
range for you to have the ability to qualify for a low interest
debt consolidation loan. In other words, if you are interested
in consolidating your debt as part of an overall debt management
program or plan, you need to be proactive and actually seek out
a low interest debt consolidation loan before your financial
situation becomes out of line, negatively impacting your credit
score and rendering it unlikely that you will be able to obtain
a low interest debt consolidation loan.

Dealing with a Low Credit Score

If you do have a credit score that falls below that point at
which you would be more likely to be approved for a low interest
debt consolidation loan, you will want to forgo applying for a
low interest debt consolidation loan for the time being. You
will want to take steps to better your credit score in advance
of applying for a low interest debt consolidation loan. Steps
that you will want to consider taking include bringing all of
your credit accounts current and paying down -- at least to some
degree -- the balances on some of your credit accounts. You
will also want to make certain that there is no incorrect
information on your credit report that is negatively impacting
your credit score.

About The Author: Thomas Erikson is co-founder of
http://www.your-debt-consolidation-loan.com which provides debt
consolidation information and solutions. Find out how you can
effectively get your finances under control with a Low Interest
Debt Consolidation Loan.

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