In the eyes of a creditor how does debt consolidation on a credit report?
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It depends on what type of debt consolidation you are talking about and what type of creditor you have looking at your credit report. If you are talking about a consumer credit counseling type of agency, many creditors consider that as a step barely above bankruptcy. If you are just talking about taking out a personal loan, a 2nd mortgage, a home equity line of credit, or refinancing your home to pay off other credit, then that will help your credit score out quite a bit.
Also if you are looking to buy a home or refinance a home, but you are in consumer credit counseling there are very few mortgage lenders who will lend to someone in consumer credit counseling. They will either require you quit the CCC service or that you wait for a specified period of time of being out of CCC before they will approve you for a mortgage. See the sources for a blog that has a ton of helpful information on credit and credit scoring
It looks pretty bad. My brother went to a debt consolidator when he lost his job and moved to another state. Because of that, a lot of banks didn;'t want to give him a loan, even though he has a failry good credit score.
I can't speak for all creditors; however, I am in the process of buying a home and have been on debt consolidation for 3 1/2 years. My credit score is almost as good as my husband who has never had credit issues. I think it would depend on what else you have on your credit report.
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