(NewsNation) — A credit score is like a school GPA — one bad grade, and good luck recovering.
Banks look to credit scores to approve or deny a person for a loan, including loans to consolidate debt.
Debt consolidation is the process of combining your debts into one, leaving you with one payment, which can be easier to manage. One way to achieve this is through a debt consolidation loan.
Can you consolidate credit card debt with bad credit? It’s possible.
With a debt consolidation loan, you apply for the loan from a bank, credit union or online lender. The money from this loan will pay off your other debts. You will then be responsible for paying back the new loan over two to seven years.
While you will still be in debt, you will only have one creditor to pay back under a debt consolidation loan.
Debt consolidation loans require a credit check, but people with poor credit tend to have options — some with higher interest rates and sign-up costs.
Some online financial sites, such as NerdWallet, have a list comparing different loan options.
