Does a Credit Card Debt Consolidation Company Ruin Your Credit?

There are those that find the potential to get their debts under control through a credit card debt consolidation company quite intriguing. On the other side of the proverbial coin, there are those that find the concept of such a company to be too good to be true. They are concerned about rumors that working with such a service can ruin their credit rating. Of course, this is not a claim made by the debt consolidation services. So, this raises obvious questions regarding whether or not this is true. Is it? debt consolidation loans

First and foremost, the word "ruin" is an extremely strong one. It infers a sort of total finality on the subject. While it is possible to "ruin" one's credit a number of ways, a debt consolidation company does not seek this goal. Will there be an impact on one's credit? Quite possibly, yes. However, the level of such an impact will depend on the steps that are taken. debt consolidation loans

When the credit card debt consolidation service negotiates with your lenders, they may reduce the interest rates. This might have a minor impact on your credit score. They may also seek to lower your monthly minimum payments. This also may have an impact on your credit rating. How strong of an impact it may have truly depends on how significant these changes or reductions are. However, it is doubtful they will reach levels of "ruination." debt consolidation loans

Now, if the credit card debt consolidation company opts to settle a portion of the debt you owe, this will definitely have a serious impact on your already troubled credit rating. In fact, the damage to your credit rating might be significant; yet, it is not irreparable. Over time, you may be able to improve your credit rating as long as you pay your bills on time and keep your debts low. Again, this will take time but it can be done.