If you want to take debt whether for purchasing a car or a house, you need to have good credit rating. Having good debt and making payments on time gives you a good credit rating.

That good rating allows you to borrow more money at better interest rates and can possibly help your financial position. So your credit rating is directly proportional to your financial position.

The important thing is to take some step in order to reduce your debt as early as possible. Because the more you wait, the more chances are there to lose the cash.

There are few types of debt consolidation:

· Home Equity Loan: If you are owner of a house, you can take a debt consolidation (Home Equity Loan). It is a loan where the property would be kept against loan. Lender will have a line on your house until you pay back the whole amount taken as home equity loan.

· As loan collateral you will remain the owner of your house, debt consolidation would keep you secure from bankruptcy and will keep the creditors away and helps you to make you debt free. You will have a single monthly payment which will considerably be less than the ones you had to pay earlier, so in the mean while you will be saving a little money.

· Student Loan Consolidation

· Unsecured Debt Consolidation Loans