Many people turn to a bad credit debt consolidation loan in order to gain some control over the amount of outstanding debt they have and also in the hopes that they will be better able to increase their credit score. While this can be helpful, many financial advisors feel that it is not the best way to attack debt and increase your credit score.
Individuals with debt may benefit from simply paying off one debt source at a time. There are many proponents of this method where anyone with debt, beginning with the smallest amount, starts to focus as much money on that debt source as they can while paying minimum payments on the rest of their debt.
This allows the individual to pay off that small debt quickly, then go to the next, smallest amount of debt, and repeat the process until their debt is gone. This is a debt payment plan that helps many individuals, and by paying off debts faster, one may save more money and increase their credit score in a timelier manner.
One problem though is that using this method to get out of debt takes financial discipline, saving, and a change in spending habits. Not spending money on unnecessary purchases, and then spending within one’s financial means is the only way to make this work, and keep you debt free.