After Debt Consolidation – How Long Before My Credit Score Comes Back?

By William Finch on March 10, 2010, 6:02 am Posted in Business News

One of the most common questions that a debtor has in regards to consolidating their debt is how long it will be before their credit improves. The speed in which a debtor’s credit score will repair after a debt consolidation depends on various factors, many of which are within their control.

Form And Level Of Debt Consolidation

The first factor that affects the speed in which a debtor’s credit score will repair after a debt consolidation takes place is the form and level of a debt consolidation. In some forms of debt consolidation a debt consolidation firm simply pays off all existing balances and consolidates payments into one easy payment. In other situations, a debt consolidation firm will negotiate with a debtor’s creditors in an attempt to waive all or a portion of the debt owed. In general, the less that a creditor is forced to give up, the less a debtor’s credit will be hindered and the sooner the debtor’s credit will improve.

Payment Activity Going Forward

Another factor that influences the speed in which a debtor’s credit score will repair after a debt consolidation takes place is their payment activity going forward. If a debtor continues to miss payments or make payments late, then their credit score will actually go down after a debt consolidation takes place. If the debtor makes all payments on time, their credit should begin to improve within a few years of making successful payments.

 

Management Of Other Credit

Another factor that influences the speed in which debtor’s credit score will improve is how they manage their other credit going forward. The debtor should attempt to open a secured loan or credit card. Making timely payments on these secured accounts will also help improve a debtor’s score.

Related posts:

1. Is Filing Bancruptcy Or Debt Consolidation Better For My Credit Score?
2. Differences Between A Credit Repair Co. And A Debt Consolidation Co.
3. Can I Write Off Credit Card Debt On A Debt Consolidation Loan?
4. How Do Bad Credit Debt Consolidation Home Equity Loans Work?
5. Little Known Advantages Of A Bill Consolidation Or Debt Help Program