Debt Consolidation and Buying a House – The Implications

December 18, 2009 by  Filed under: Debt 

One of the most important things that you will ever do financially is purchase a house. For long, this has been the embodiment of the “American dream”, but in order to purchase a house, you have to have the credit to make it happen. For many people who suffer from bad debt, their credit score is messed up and it has some serious implications in regards to their ability to buy a home. With that in mind, it is time to consider how some of the most popular debt relief efforts will impact your ability to own a home. Debt consolidation is one process that can help you get back on track towards house ownership.

Improving your credit score

The most obvious way to improve your chances of owning a home is by improving your credit score. It is no secret that getting a mortgage is difficult, no matter how bad the economy happens to be. In this current economy with lenders being tighter with their money, it is especially tough to get approved for a mortgage. If you want to be able to buy a house, you have to have solid credit. One of the things that will hold your credit score down is having too many open, revolving credit accounts. These things take away valuable points.

When you sign on with a debt consolidation program, you are able to immediately change one of these negative credit influences. Instead of having seven open accounts, you pay those off with the debt consolidation loan and you now have only one open account. Though the total amount of credit is unchanged, this simple difference in the number of revolving accounts makes a huge difference. That is one way that going with a consolidation program will help you if your goal is to eventually be a home owner in this country.

That is certainly not the only way consolidating debts will help you get to your goal. Another has to do with helping people avoid things like bankruptcy. When you get a debt consolidation loan, it doesn’t necessarily hurt your credit. In many ways, it helps your credit and it is especially helpful in keeping you away from the major financial pitfalls that will cause you to have trouble getting a mortgage. If you were to hit financial rock bottom and have to declare bankruptcy, you wouldn’t be able to purchase a home for a period of seven years in all likelihood, so debt consolidation can keep that option at bay.

NOTE: By researching and comparing the best debt consolidation companies in the market, you will determine the one that meets your very specific financial situation.

Hector Milla runs the Best Debt Consolidation Services website – where you can see his best rated debt consolidation service. Visit for further information.

Article Source:

Hector Milla - EzineArticles Expert Author

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