Debt consolidation is a loan used to payoff or pay down other loans. A Debt consolidation loan consolidates debt and allows you to make one payment instead of many payments.

The goal of a debt consolidation loan is to lower your monthly payments, reduce interest and relieve financial pressure.

If you own your own home, the best types of debt consolidation loans are home equity loans or 2nd mortgages. These can give you a much lower interest rate and monthly payment then an unsecured loan.

Another way to lower your monthly payment is to lengthen the term of your loan. The more years you opt for the lower payment.

Now Remember, Debt consolidation does not pay-off your debt, it merely enables you to payoff your existing debt faster and with less pressure.

It doesn’t magically give you more money to spend, your debt is the same. Just consolidated and hopefully at a lower interest rate.

After a debt consolidation loan you should cut up your old Credit Cards.. Don’t cancel them, but cut them up. If you cancel them it will lower your credit score, because your “available credit” will be diminished. Available credit is an important factor in your credit score.

One of the best places I’ve seen to consolidate your debt is Prosper.com. Private investors bid on your debt, much like Ebay. I highly recommend you look into Prosper.

And if you own your own home, and have decent credit, check with your local banks to see offers they have on Equity or Debt Consoldation Loans. More and more banks are offering unsecured debt consolidation loans, some of these are good deals, but make sure you read the fine print..
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Lori Beck

http://lab.prowealthsuccess.com/

Your Credit Score is one of the most important numbers in your life.  This score is a number between 300 and 850 and is also known as a FICO credit score. FICO stands for for Fair Isaac Company. Fair Isaac got together with 3 credit reporting agencies, Experian, Equifax and Trans Union in the early 1980s and created this credit reporting score.

Each company uses somewhat different factors to determine your score, but a 700 from Equifax is equivalent to the same score from Trans Union.

These agencies look at your current debts, loans, and financial obligations, and then create your credit profile. They then take this credit profile and compare it to others in similar circumstances and they give you a rank based on those peoples’ past credit history and how likely they were to pay their debts. Your score is the supposed to represent how likely you are to repay your debts.

Companies and lenders have their own method for using credit score to issue you credit or services. Normally a person with a score of 650 and above has good credit. The 620-650 range, is considered average credit scores. People in the category, 620 and below, can still get credit, but the with higher finance charges and terms.

You are entitled to get a free credit report from each of the three companies yearly.

The information in your reports can help you located resolve any errors in the report. Many people get denied credit based on low FICO scores, to find out old information or loans are still outstanding.

It is fairly simple for a company to put negative information on your credit report. If there is incorrect information reported against you, you have the right to remove it.

You can either try calling the company directly to resolve it or write a formal letter..  When you dispute information a company has just 30 days to respond or they must remove it.. Many times a letter writing campaign to your creditors can work wonders on your credit score.

Your Credit Score is one of the most important numbers in your life..  The higher your score, the lower interest loans you will qualify for potentially saving you many 1000’s of dollars in interest throughout your lifre.