Debt Consolidation and Credit Scores
Your credit score is one of the factors that determine which offers you will receive from lenders. It will help determine which lenders would accept or deny your loan applications. In addition to that, it will be one of the factors considered when determining interest rates they’d be willing to offer you.
When you’re struggling with debt, the way you choose to handle it will have a profound effect on your credit score. One of the ways people deal with overwhelming debt is debt consolidation. But debt consolidation loans have an interesting relationship with your credit score.
Debt Consolidation vs Personal Loans
Debt Consolidation & Wage Garnishment
If you are in debt, you might be familiar with the term “Wage garnishment”. For those of you who are not, wage garnishment is an action that takes place when a court rules a portion of your income must be redirected to paying off debt. The court may order your employer to withhold a portion of your income and send it to a creditor. Clearly, this may be extremely unpleasant. Read our guide to find How to Deal With Wage Garnishment.