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Consumers `increasingly experiencing debt problems` Over-50s `better at managing credit card debt` New banking rules `may restrict access to loans` UK `must reduce consumer debt` 700k `on Debt Management Plans` Recession `could lead to financial problems for retirees` Charity sees increase in debt, mortgage and loan arrear enquiries Retirees` finances `may be damaged by rate cut` Consumers `aiming to reduce spending` People `increasingly turning to illegal loans` Children raised in credit crunch `may be better able to manage money` Many parents `pushed into debt by adult children` Young people `failing to protect themselves for debt repayments` Consumers in East Midlands `relying less on debt to fund lives` Plans set out to help people in debt PPI ban `could leave consumers without loan cover` Govt `must step in to stop debt addiction` Cash-strapped Brits `see fraud as more acceptable` People `should not rely on mortgage rescue plan` Consumers `to take out £3bn in debt consolidation loans by Easter`

Debt consolidation `protects credit score`

08/08/2007

Taking out a debt consolidation loan can help consumers avoid a bad credit rating, according to an independent financial advisor.

Adrian Kidd, spokesperson for Mint Financial Services, said that "it`s a good thing" to consolidate debts into one lump sum because it protects a consumer`s credit score and allows them to pay off the capital.

"At least with a loan you are given the time and you know that within five or seven years it will be gone, whereas just paying the interest every month without clearing the balance is a fairly suffocating process," he remarked.

Loans also usually offer lower APRs than credit cards, he added, explaining that this factor is "the main draw" for many people who choose debt consolidation - many of whom have faced a higher rate after their zero per cent credit card deal has ended.

"If you have to change your credit card every year for the zero per cent it can take its toll on your credit score," commented Mr Kidd.

According to the Motley Fool, one-quarter of people who choose debt consolidation loans clear their debts early.

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