Does consolidating credit card debt hurt your credit score Instant chat sexual dare

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Why: Paying in cash and rarely using credit cards may be a point of pride for you, but it isn’t a good move for your credit score.

As a result of the credit crisis, companies that once would have left inactive accounts open and tried to lure you back are now quick to close “sock drawer” cards.

So use your cards, says Weston: “Regular, responsible use will help to maintain and improve your score.” If your card is canceled for nonuse, it’s difficult to get your account reopened.

You can try by placing a call to the credit-card company and highlighting your stellar payment history, says Sheri L.

There are a few ways you can do this, including a balance transfer, a debt consolidation loan, a personal loan or a peer-to-peer loan.

You can learn more about your options in the guide below and decide which one is right for you.

Debt consolidation is a third-party payment system. Agencies range in quality so make sure you shop around. Most debt consolidation plans are structured the same way. They ensure member agencies pass rigorous standards set forth by the Council on Accreditation or another approved third party, and that their counselors pass a comprehensive certification program. Financial institutions don't give preferential treatment to any one organization, nonprofit or otherwise.

However, if you just happen to have accounts with creditors that don't offer any concessions, that benefit is reduced. Look for a nonprofit credit counseling organization that belongs to either the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).

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Paying your loan balances is better for your credit score.

“Inactive accounts are unprofitable for credit-card companies,” says Liz Pulliam Weston, the author of (FT Press, , amazon.com) and a personal-finance columnist for MSN Money.

“Now it’s use it or lose it.” While you may not mind losing a seldom-used card, there’s more serious fallout: Because 30 percent of your score is based on your debt-to-credit-limit ratio―the gap between what you owe on all credit cards and your total available credit―having one account closed increases that ratio and thus lowers your score.

If you have enough cash left over after subtracting expenses from income, consolidation will be presented along with other options. How do you know if a debt management plan will work in your favor?

When a counselor is knowledgeable and compassionate, these sessions can be enlightening and motivating. If he or she acts bored, judgmental or pushy, request a different counselor. First, the bulk of your balances should be in unsecured debts, such as credit and charge cards, personal loans and, sometimes, collection accounts.

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