Millions of people are suffering from adverse credit and although many companies are currently offering consolidation services, it is actually hard to find the most suitable products for consolidation on your own. Many companies that are offering finance for bad credit are actually not aiming for improving your credit rating or repairing your credit but just provide you with a quick solution without taking into consideration your best interest.
Do try and shop around whether you are looking for a consolidation loan directly from a lender, or consolidation service. You have to know that many companies offer free consultation and there are a couple of debt counseling services available throughout the country that are signed up for a government scheme.
Be aware that you might end up being tied up in a deal that is going to affect your ability to get new credit for a long time. You might also get charged a flat fee from the service provider, or arrangement fee, so the best practice is to shop around, check the company’s reputation before you do sign an agreement or make any commitment.
Always try and arrange a no obligation one to one credit review with either your own bank, debt counseling service or debt consolidation company. You need to inquire beforehand about whose services they offer, if they are getting paid commission for offering certain products.
If you decide to do something about your bad credit on your own, you do have to start with requesting a copy of your credit file, to see if every single piece of information held is correct. You have to check your credit score as well, because that is going to determine how much consolidation finance you are going to be accepted for. It is also going to affect the interest rate and loan terms you might be offered.
Next you have to get a balance / settlement figure for all your outstanding finance to see how much you need to apply for altogether. Your best bet is to try and put all your credit into one single product if possible. Generally speaking if you are a homeowner you will have better chances to obtain a higher amount of credit for consolidation secured on your property. On the other hand secured finance is usually easier to obtain and usually has a much lower interest rate as well, showing the lower risk the bank has to take.
What to avoid: You have to avoid products that do not have a fixed interest rate, because credit interest is likely to increase in the next few years. So you have to make sure that you will not only get a good deal but your repayments are not going to go up. Also before you do opt in for IVA you need to consider consequences beforehand. Try and avoid bankruptcy if you can and only use it as a last resort.