Improving Your Credit File with Debt Consolidation
Multiple debts due at different types of the month may be prove a problem if you find that you are struggling to pay all of these debts and therefore consequently miss payments which adds further charges to your debt level.
This will be adversely damaging your credit file. Missing payments to your debts is never a good thing, so you may think that debt consolidation is a good way for you to get your finances in order.
Improving Your Credit File with Debt Consolidation
There is a chance of improving your credit file with a debt consolidation loan. Here are two ways that your credit file could improve by combining your unsecured debt into one secured loan:
1: Only one Debt
– Consolidating all your debts, such as store cards, personal loans and credit cards, means that you will have paid off these debts and will be left with just the single loan to pay. Credit companies will be able to see that you have paid off these debts which can boost your credit rating.
2: Don't get into any more debt
- If you consolidate your debt and then continue to use the consolidated credit cards, the increase in debt will show on your credit file.
What you need to do is cancel your credit cards or give them to someone you trust who will only give them back in a true financial emergency. If you consolidate your debts but continue to use the cards as before, you will end up in a worse financial position than what you started with.
One of the best ways to see how you can begin improving your credit file with debt consolidation is to seek professional debt consolidation advice. Our debt advisors are on hand to offer you expert advice so call freephone 0800 0481 770.
LOANS MAY BE SECURED ON YOUR HOME. THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER DEBTS SECURED ON IT. IF YOU ARE THINKING OF CONSOLIDATING EXISTING BORROWING YOU SHOULD BE AWARE THAT YOU MAY BE EXTENDING THE TERMS OF THE DEBT AND INCREASING THE TOTAL AMOUNT YOU REPAY.
For mortgages and re-mortgages the overall cost for comparison is 8.5% APR variable and for secured loans 14.5% APR variable. The actual rate will depend upon your circumstances. Ask for a personalised illustration. A broker fee may be payable on completion, and will depend on your circumstances. For mortgages and re-mortgages this fee is typically between 0% and 3% of the gross mortgage amount, subject to a minimum of £2,495 and a maximum of £3,995. For secured loans, the fee is typically between 0% and 10% of the loan value.
DebtConsolidate.co.uk is a trading style of Ask Finance Ltd (Registered in England and Wales. Company number 4229724), a wholly owned company of the Harrington Brooks Group Ltd. Ask Finance Ltd is licensed under the 1974 Consumer Credit Act to carry on the business of consumer credit, consumer brokerage, debt adjusting and debt counselling. Consumer Credit License No: 507130. Ask Finance Ltd is authorised and regulated by the Financial Services Authority (FSA) - FSA No: 300490 - for the provision of mortgage advice and arranging insurance.
