Free Credit Report
If you are considering credit consolidation, it is good to know exactly who you owe before you proceed. The best way to really determine the extent of your debt is to pull your own credit report. You can receive a free credit report under the terms of the Fair Credit Reporting Act. This act stipulates that the credit reporting bureaus are required to provide you with a free copy of your credit report one time per annum. You can also receive a free credit report any time you are turned down for credit (as well as your credit score, under recent laws). Your credit report will detail your creditors and help you get an idea about the “big picture” when it comes to your total debts. This can help you to better prepare for credit consolidation.
What is Credit Consolidation?
Credit consolidation is the process of rolling all of your debts into one debt, and then making one payment each month to one lender – your credit consolation company. This payment is usually less than the total of your combined payments now, and can allow you to take care of all of your creditors at once. Credit consolidation has a number of benefits to enjoy, including saving money, keeping more money in your pocket each month for other needs, and getting out of debt faster, all without filing for bankruptcy.
Knowing Who You Owe With a Free Credit Report
Many consumers think that they are aware of all of their creditors. But the fact of the matter is that sometimes your debt may be “owned” by a new lender. This is particularly the case if you have outstanding debt that has fallen into default. For example, if you have an old debt that you have forgotten about that hasn’t been paid on in three years, then the creditor may have “written off” the debt, or he may have sold it to a company that buys old debt for pennies on the dollar. When there is a new owner for your debt obligation, you will have to pay that owner off, not the original owner of the debt. This resale of your debt can be a good thing from the perspective of paying off the debt, since the new debt owner does not have a lot of money invested in collecting the debt from you – and is often willing to negotiate for a payoff that is far less than what you really owe. Your credit consolidation company can help you negotiate with all of your lenders to hopefully reduce the total amount that you owe and to help you get a better interest rate on your debt.
How to Obtain Your Credit Report
Getting a copy of your credit report before credit consolidation is easy. Simply visit AnnualCreditReport.Com, register for an account, and then answer some questions to prove your identity. Once that is done, you can proceed to view your credit report with the three major credit reporting bureaus in the U.S., including Experian, Trans-Union, and Equifax. Additionally, you can print your report out for future reference, which is recommended if you are planning to go for credit consolidation to get rid of your debts.