Many people with bad credit look to debt consolidation loans to solve their troubles, but sadly pooling all of your debt into one area doesn’t eliminate it but simply moves it. People who continually shift debt from one card to another may mean well but it does little to get them out of debt.
While there may be a minority of individuals with bad credit that may benefit from a consolidation loan, there could be a better way for those looking to improve their credit score and get out of debt as well.
Typically, someone with a few sources of debt that may have caused their credit score to go from good to bad would benefit from focusing on one source of debt at a time. It will take budgeting, sacrifice and work, but it can get you out of debt and help improve your credit score as well.
By paying the minimum payment on all your debt except one source, then paying as much as you can on that lone debt source, you can eliminate that debt faster and then move up the debt latter, usually going from the smallest amount to the largest.
This can help improve your credit score, but when you are free of these little debts, you need to budget, again, and make wise purchases. Saving money for a purchase and then buying it on credit will benefit you because you have the money to pay off the charge and it shows on your credit score that you are making and paying off credit purchases.
If you are set on getting a debt consolidation loan, though, and you are unwilling or able to attack sources of debt one at a time, remember, no matter how good it may seem, a debt consolidation loan can be costly in the long run. Be sure you look at the interest and life of the loan and, if possible, pay more than your minimum requirement so you can get out of debt faster.