Debt is a huge part of your overall credit score. While too much debt can hurt your credit score, having no debt at all can hurt your credit score as well.
On top of that, a history of making late payments on your debt, or falling behind in your payments, will also have a negative impact on your credit score. So how do you eliminate the negative impact on your credit score while dealing with debt?
One option to your debt problem is debt consolidation. Having a lot of different loans can lead to a poor credit score. By consolidating your debt, you exchange many debts for one. This also makes it easier on you as you can make one monthly payment to one place instead of many different payments to many different creditors.
In addition, a good debt consolidation plan can save you money by replacing many high interest debts with one lower interest debt. This will save you money both long term and on your monthly payments.
Make Your Payments as Large as Possible
A big mistake many people make with credit card debt is to do nothing more than the minimum monthly payment. This is a horrible idea if you want to get out of debt and improve your credit score.
In fact, with a lot of credit card companies today, you will never pay off the debt by just making the minimum monthly payments. You’ll be paying off your credit card debt for your entire life and will pay multiples of what you actually borrowed against your credit card.
Don’t Use One Debt to Pay Another
I’m not talking about a good debt consolidation program as mentioned above, where you exchange many high interest rate debts for one lower interest rate debt. I’m talking about a practice many people fall into and that is juggling credit card debt by paying the bill on one credit card with another credit card that has just as damaging an interest rate.
Utilizing these three debt management tips properly will help you pay down your debt, improve your credit score, and keep you away from accumulating more debt through bad debt payment decisions.
Learn more about how to use debt tips with Freddie Johnson’s free articles on debt relief, debt consolidation, debt management and credit repair tips at http://www.mydebtconsolidationtips.com