Some people would like to consolidate their debts and have either a lower monthly payment or fewer monthly payments. You probably should not consolidate your debts if…

• Your habits are not likely to change.
• The interest rate for consolidation is high.

You might want to seriously consider the possibility of debt consolidation if it would…

1. Stop creditor harassment. (Creditors are usually very happy to receive regular monthly payments and work with a 3rd party to get their debtors back on track.)
2. Lower monthly payments. (Sometimes creditors are willing to work with 3rd parties and lower your current interest rate.)
3. Reduce finance charges. (Many creditors offer assistance with your plan by lowering or eliminating interest charges and late fees.)

If you follow the steps outlined above, it will take about two years to rebuild your credit so that you won’t be turned down for a major credit card or loan. After around four years, you should be able to qualify for a mortgage.

Your thoughts on this subject? Your comments appreciated!

Content © Rich Brott, 2011

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