After struggling with high interest rates throughout the year, carrying that burden to 2016 presents a big challenge for many consumers. If you have any option you can explore to bring those interest rates down, this could be the right time. High interest credit will continue to create a dent on your finances. It will continue pushing you far from improving your credit score, which is your ultimate goal.

Debts are not bad, but bad debts are bad, meaning that people cannot live without borrowing and using credit facilities and what they need to know is avoid turning the good debt into a bad debt. For one, debt consolidation will not solve the problems, which are sinking your credit rating. In order to tackle the problem with your score, you have to know what things are making you end up in state of heavy indebtedness.

When you move the high interest rate balances to a new card with a lower interest rate in an aim to reduce the burden caused by the hefty interest rates, then you are minimizing the cost of the debt. This is a positive step in minimizing the debt, and it may help you come out of the debt fast. Although applying for a balance transfer card will slightly affect your score, you are able to rise up again, and continue improving that score.

When you apply for the balance transfer card, an inquiry will be made to the credit bureaus, something that will deduct some points from your score. But on the other hand, you will have a low debt-to-credit ratio right on your new credit card. Consumers in subprime credit score situation should focus on how to create an overall financial health rather than worrying about the effects on their score.

If you manage to develop a heavy financial base, you can quickly improve the score. The issues you need to deal with are such as solving the problems, which are causing you to have large amount of credit card debts. You need to start saving for emergencies which often compel people to borrow loans with high interest rates such as installment loans, payday loans, and other highly priced cash advance short term loans.

Even a small high interest or predator loan can affect your finances in a very big way. The debt consolidation option you choose should be viable and not deceptive. Loan consolidation companies often charge fees for their services, and they may not be the best option. You can consolidate your debt by obtaining a personal loan or by transferring your debt to the balance transfer cards.

Consolidating your debt makes it easier for you to plan for the new loan. You can budget appropriately to be able to repay the new loan as required, and with time, you will be able to settle down your debt. However, in the event that you are not able to consolidate your loan, then you have to continue repaying your original debts but there is a still a way you can overcome the burden. One thing you should focus when repaying the debts is to pay off those with higher rates first, and then in that order until you reach those cards with lower rates so as to avoid debt account aversion.