Thursday, January 04, 2007
Debt consolidation companies develop relationship with your creditors which can help you reestablish a positive credit history by handling your payments. They will also lower your interest rates and provide a structured payment plan.Debt consolidators create a repayment plan based on what you are currently paying. Within this figure, they can get you out of debt sooner by negotiating lower rates with your debt holders.
Very soon, you can see a significant improvement in your credit score. While most lenders will temporally freeze your credit when you first begin a debt consolidation plan, they will usually extend new credit after twelve months.A reduction in your debt to income ratio will also bolster your credit score. Debt consolidation services basically act like your bookkeeper. You send them a check every month. From that amount, they pay your creditors and deduct their own small fee.
Before selecting a debt consolidation company, look at several sites. Make sure they answer your questions and provide you with detailed information. Request pay off dates on your accounts and information on their fees.Once you find a company that offers reasonable rates and you feel comfortable with, go ahead and start the process. The sooner you start, the quicker you will get out of debt.