Finance home re finance mortgage debt consolidating

This is also a good reason not to close old accounts where you’ve had a solid repayment record.Trying to get rid of old good debt “is like making straight A’s in high school and trying to expunge the record 20 years later,” Ulzheimer says.In order to qualify for a debt consolidation loan that will enable you to pay off your other debts, you must have enough equity in your home to be eligible to borrow that large sum.Some loan programs limit the amount you can borrow to 80% of the home’s value, while others will allow up to 95% or more.“That way, you’re not polluting your credit report with a lot of balances,” he says.Some people erroneously believe that old debt on their credit report is bad.The minute they get their home or car paid off, they’re on the phone trying to get it removed from their credit report.

Every time you apply for credit, it can cause a small dip in your credit score that lasts a year.The longer your history of good debt is, the better it is for your score.One of the ways to improve your credit score: Leave old debt and good accounts on as long as possible.“A good way to improve your credit score is to eliminate nuisance balances,” says John Ulzheimer, a nationally recognized credit expert formerly of FICO and Equifax.Those are the small balances you have on a number of credit cards.

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