Much to the dismay of many who need help with debt consolidation, your credit could be so bad that you don’t qualify for services through a reputable debt relief company. Don’t be discouraged! There are a few things you can do right away that might raise your credit score just enough to make a difference.
However, if small initial steps don’t raise your credit score enough to qualify you for a debt consolidation loan, consider spending a little time doing small things that raise a credit score. You’ll also want to spend some time learning how credit works.
What Is This FICO Score Anyway?
To most people, credit is as simple as going online and using digital credit cards to buy things online. People don’t really understand how credit works or how financial institutions calculate financial risk. According to the experts at https://www.bills.com ,learning about the nature of credit scores helps consumers grasp the complex nature of credit in our economy.
Credit structures help the great economies of the world function by setting rules that financial institutions must follow when using money. These same rules apply to all people but at different levels with different calculations for financial risk management.
For generations, some economists have sought how to better serve the public inside these credit levels. This service included using mathematics to calculate an individual company or person’s specific financial risk.
FICO is an acronym for the Fair Isaac Corporation, a company that works to even the conditions surrounding credit services. In the fifties, FICO pioneered the use of factual information to understand the likelihood that entities (companies, people, etc.) will pay their debts.
There is no set way to manage credit. However, a FICO score has emerged as a primary selling point for credit ratings. Because your FICO score comes from insights based on your actual debt-paying behavior, new facts, good and bad, will help adjust your score enough to qualify for debt consolidation.
Credit Score Influencers
Understanding what you can do to raise your FICO score enough to qualify for debt consolidation requires knowing what influences credit scores. These influencers include:
- Individual bill-paying history. Your credit history might go way back. However, most companies only go back about 7 to 10 years. There are exceptions so check your local state laws.
- An accounting of all loans still outstanding.
- Current unpaid bills, yes, all bills. Sometimes paying the smallest bill raises a FICO score.
- The time each account has been active
- New credit applications
- Debt sent to debt collectors. Even the most mundane of bill collector instances can influence a credit score.
- Negative information such as eviction, foreclosure, or bankruptcy.
Understanding the full scope of your debt in terms of these influencers helps you notice little things you can do to raise your credit score. When you reach out for help about debt consolidation for bad credit, you’ll know what you’re dealing with — and why.
Conclusion
A FICO score below 670 could hurt your chances of getting the debt consolidation help you need. Looking at the information above, you should be able to find some small things you can do. The credit score you need for successful debt consolidation could be as simple as paying that monthly subscription fee.This is why it’s also critical to do everything possible to ensure your credit score is accurate before applying for a loan. Bad information on your credit report could be dragging your score down just enough to make a difference.