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This can happen when you move interest debt that is non-deductible to deductible debt.
Non-deductible debt includes auto loans, credit card and personal lines of credit.
Consolidating debt involves the use of different debt plans to combine several debts, payments or loans.
For example, credit card users can put all their debts together in a consolidated credit account.
Another advantage to consolidation is that you’re moving from multiple monthly debt payments down to just one.Consolidating your debts is the easiest way to reduce your credit accounts to a minimum of 7. It simply eliminates the need to transact multiple bills, accounts, check books or automatic drafts that fall due on different dates.When you put all these debts in one account, you are able to make payments to one account which saves time and overall, makes the process of managing your finances much easier. It can help reduce taxes Debt consolidation may be able to reduce the taxes you owe and increase deductions.There are a lot of benefits to this move, including the potential to give your credit score a boost.If you’re not sure how consolidating your credit card debt will affect your score, take a look at the details below – the Nerds will tell you everything you need to know!