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Credit score & credit report

Now that you have listed your different debt lenders and repayments, you need to know all about your credit score and credit report.

It will not only be needed when you apply for a debt consolidation loan but it can also help you better apply for your loan. Applying for a debt consolidation loan is different to any other loan type, in that there are a few more requirements or documentations that would need to be submitted.

But if you follow all the guidelines and ensure that you are fully-prepared, there is no reason why you should not be able to enjoy the benefits of debt consolidation.

Credit score

A credit score determines your credit-worthiness and it is a rating between 330 and 850. It has the purpose of indicating to the lender whether you default on payments, have a good or poor credit history and if you are a high or low risk borrower.

Some lenders will reject loan applications if the applicants have poor credit ratings. However, there are lenders that are willing to approve loan applications with a bad credit score. Often, these loans have higher interest rates than standard loan types, due to the risk involved.

Either way, it is best that you know what you credit score is. You might choose to improve your score before applying for a loan. If not, you will have a fairly good idea on whether you will enjoy loan approval and a good interest rate.

Credit report

Furthermore, you could apply to receive a full credit report. This will allow you to know exactly what debt you have and to whom it is payable. This is also handy when applying for your debt consolidation loan. The lender will make use of the credit report to cover all your debt, once you have been approved.

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