How do credit scores affect personal bankruptcy risk?

| Jan 29, 2014 | Personal Bankruptcy |

It may seem like a far-fetched possibility for New Jersey residents, but it is possible that credit scores could affect other issues, such as the possible need for personal bankruptcy. Much of a person’s financial situation depends on credit scores and other factors. It is important to understand credit, finances and personal bankruptcy and how they affect average consumers.

New Jersey residents know that average Americans are saddled with an enormous amount of credit card debt. It is thought that one way to improve a financial situation is by converting credit card debt to a personal loan. It is suggested that this move could actually improve a credit score, which in turn could improve the overall financial situation.

This move is backed by the Wall Street Journal’s MarketWatch, which claims that, by moving credit card debt to a loan, the average consumer could get lower interest rates. Additionally, this transition could improve a credit score by as much as one hundred points. However, it is noted that this will only be sufficient if the consumer stops using the credit cards with damaging interest rates.

Credit card debt has been known to quickly spin out of control. Additionally, this can have a damaging effect on credit scores and the overall financial well-being of a person. When debt becomes unmanageable, it can often be helpful to file for personal bankruptcy. Before declaring bankruptcy or pursuing bankruptcy protection, however, it would be wise to have an overall evaluation of one’s finances. A complete review of one’s financial situation can reveal the best steps to take before moving forward with the bankruptcy process.

Source: lifehacker.com, Boost Your Credit Score by Moving Credit Card Debt to a Personal Loan, Melanie Pinola, Jan. 17, 2014