For the person going through life with a history of bad credit each day can carry little hope. None of us were born understanding how money works or started life saddled with a low 500 credit score. Action has been responsible for both our financial education and money handling. The success in those areas can many times be reflected in out credit score.
A life of debt can be turned around by changing buying habits, getting organized and cleaning up the past!
is often approached as the quick fix for those with poor credit and financial problems. It may appear as the best solution but usually becomes a stepping stone to more debt since the money handling habits have not been corrected.
Gain a True Picture
Before making any moves on taking the consolidation route it is important to get a true assessment of your current financial state. How deep in debt are you? What is the current balance on each account? Are you current or behind? If you are behind how many months?
Answering these questions will provide a much clearer picture of what steps need to be taken.
If the debt is credit card debt a consolidation loan using the equity in your home may not be a smart move. A balance transfer
to a lower interest credit card
may help but if you continue to charge away you'll face the same problem in the near future.
If the debt is rent or home mortgage, a debt consolidation package again may not be a wise move. Facing the fact of living beyond what you can afford may be the hard lesson called it's time to move or sell.
You need to look beyond throwing money at what looks like a problem and get to the root of the issue. Get real with yourself and find out what is causing you to carry the bad debt label. Fix that problem before looking at debt consolidation.