There are several ways that you can consolidate your debts. Some of the methods to consolidate your debts are definitely bad for your credit, while some will not harm your credit. In fact there are some methods that can help to improve your credit by increasing your credit score. There are many advantages of consolidating your debts. You can receive a lower interest rate in some situations, and your payments can be lowered.
Considerations
If you decide to consolidate your debts by using a debt management company, this will affect your credit history in a negative way. Your credit score can be lowered.
Types
Another way to consolidate your debts is with a home equity line of credit. It will not affect your credit negatively.
Balance transfer
You can also do a balance transfer and pay off all of your credit cards. This will not harm your credit report.
Refinance
Another way to consolidate your debts is by refinancing your first mortgage loan. Once you pay off your credit cards and other debts your credit file will not be harmed.
Second Mortgage
Taking out a second mortgage to consolidate your debts will not affect your credit in a derogatory manner unless you charge new balances on the credit cards.
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