I am $26,000 in debt and I would like to get a new car to rebuild my credit help!!?

Question

even the so called "any credit accepted" people turn me down.

I went to CCCS and they told me that I don't make enough money to pay on a debt consolidation loan. they told me to wait until I get a better job

I make almost $15.00 per hour how is that?

My take home pay is between 1600 and 1800 per month.

I have had bad credit for about 10 years due to Bipolar disorder. I don't doubt that I owe the money but I just don't have $300 to $400 per month to pay out for debt. I already pay $300 for my car now and it's used.

Answer 1

Why do people think that by putting themselves deeper in debt that it helps rebuild credit?
The First thing you have to do is make payments on all your outstanding debts. As long as you are making payments timely then you will be working toward rebuilding your credit. After a few years, then your credit score will go up.
Buying anything else on credit will just screw you up more.

Answer 2

My suggestion would be that you find a calculator online. Without an additional car loan and full coverage insurance payment plus the high cost of gas, a $26,000 loan at 20% for 6 years would mean you'd need to make payments at a rate of $622.77 per month, and by the time you have that $26,000 debt paid off it would cost you $44,839.69 at the end of the 6 years. Now your interest on that $26,000 might be more, plus a monthly user charge on that credit card. So you figure it out, could you make say $450 monthly payments on a new car plus full coverage insurance on it say $60+ a month for insurance plus maybe $120 for gas a month.....for a total of about $1325 or more a month and "not buy any clothes, necessities, christmas gifts or anything" for the next 6 years? Then add on to that all the other payments you make per month, groceries, etc. etc. and see if you can buy that new car. I'm thinking you might want to stick with the vehicle you have, or buy a nearly new one like with 22,000 miles on it or more from some place like Avis Rent A Car. By the way, buying a new car doesn't help to rebuild your credit when you're $26,000 already in debt. Making your payments on time for your credit cards and utilities and rent or mortgage "does" build your credit though.

Answer 3

Buying a new car to rebuild your credit is a really bad idea. Reason being that it only creates one line of credit, and if your credit is as bad as you say then the loan is going to cost you 29-35% interest. If you have an old car that you want to replace, your best bet is to keep it running and drive it until the wheel fall off, while you rebuild your credit.

The way to go about it is got get 2 or 3 secured credit cards. Do not get the ripoff offers that come in the mail. Those will give you deals like a $200 line of credit and with all the junk fees they charge you have $170 of that charged on the card when you get it.

Go to: http://www.cardweb.com/perl/cardlocator/survey/secured
and you will see a list of cards that better deals. Get one at a time. When the card arrives it will have the annual fee charged on the card. Pay it immediately, without hesitation. Then take it to the bank and put it in your safe deposit box. Get one if you don't already have one. When you have three cards locked away safely you can start watching the calendar. Be sure to keep the box rent paid. The idea is to not ever have a balance on these cards. Do not think of them as credit cards. Think of them as tools, which is what they are. You are going to use them to help rebuild your credit. They are not much good though, until they have been open and perfect for a minimum of 12 months each. That is when they will be considered in a positive light by other creditors--a car dealer perhaps.

While you are "seasoning" your secured cards, you must get all of your other debt current. If your debts have been charged off then you need to contact the creditors and negotiate settlements. They would rather take a settlement for a cash offer than to get nothing. Whatever you negotiate they must give you in writing before you ever send them a penny. Part of the negotiation must be that "upon receipt of "x" dollars they will report to all three national credit bureaus that your account is paid in full with a zero balance."

Future creditors may be willing to forgive past sins if it truly looks like you have turned things around. So when they look at your credit reports and see that you paid off or have brought current your past debt problems and that you have established new credit that has been kept clean, they will look favorably upon you.

If any part of your current debt problem is credit cards that are still open accounts, then proceed to the bank safe deposit box step. Out of sight, out of temptation to go shopping. It is hard to do impulse shopping when the cards are across town under lock and key.

Answer 4

http://www.cccsintl.org/

Start there. They will call your debtors and negotiate a lower interest rate and an appropriate price that you will need to pay monthly in order to reduce your debt.

They also educate you on credit.

In the meantime, fix what you have and save some cash. Don't bother buying a car new, either. If you are in NEED of a car, buy used and buy something that isn't a lemon, but will get you by.

If you do NOT need a car, the best repair to your credit is to pay your bills off. CCCS doesn't cost you money, and is NOT bankruptcy. It's a great place. I know. I've been there.

Answer 5

The best thing to do is apply for 0% interest rate credit cards. Then look at all of your debt (credit cards, loans, etc.) and sort them by interest rate from highest to lowest. If you can get a 0% credit card put the balances of the cards and loans with the highest interest on the 0% card. Then begin paying the minimum on the 0% cards. Whatever cards and loans you have left pay more than the minimum on those. if you can't get a 0% card then just start paying more than the minimum on the high interest cards first and only pay the minimum on the others. This should help.

Answer 6

sophieb is on track here.

You make $15 an hour....so rough guess you take home around $600 a month. The cost of a new car loan, insurance, an expenses will eat up half of this easily. You won't have much to live on.

So what you are actually saying is you plan to ignore the $26k in debts completely. Right?

Your hope that buying a new car will improve your credit is pure fiction. Your record will still have all of those collections, and soon you will have lawsuits hitting you.

You need to rethink your plan.

Answer 7

Hi, These articles might help:

Debt Consolidation - Get Out Of Debt
http://www.askaquery.com/Answers/qn1643.html

How to Hire a Debt Counselor?
http://www.askaquery.com/Answers/qn1584.html

What is Debt Relief?
http://www.askaquery.com/Answers/qn1583.html

Debt Management and Building Wealth
http://www.askaquery.com/Answers/qn1581

Answer 8

The last thing you need is a new car. Get a part-time job and pay off this debt that you have. You can not just push it under the rug,it's there deal with it first.

Answer 9

Before you do anything else, go to www.daveramsey.com and get his book. I think the title is "The Total Money Makeover"

You need it badly. Good Luck

Answer 10

unless you make over 50,000 you have no hope....pay your bills and save for a car