Wow.. debt and score?

Question

Ok, So.. In a way I have bit off more than I could chew.. I haven't been responsible and I have just spent..

So, I am sitting here with 15k in debt. I have never missed a payment.. and I often pay more than the minimum.. But, at this rate its going to take years to pay off.. So, I cut all my cards up and just started paying them down...

I was wondering if a loan (personal) was ok to get to pay off the cards, and my score go up.. trying to refi my house..

I have learned my lesson abou credit cards.. hence why they are cut up.. and I have paid off alot.. and closed them...

Just any advise would help..

Thanks!

Answer 1

a; under no circumstances get a new loan, institutional or private.

b; pay off each debt when due
and then, IN THE same month,
send 10-25% , more and stipulate
that the 2nd payment is to be applied only to principle.

c; in some circumstances, lenders will allow you to split your payments into
2 parts. IF they do, pay on the first and the 15th. If they permit it,
it will cut your total payments by
20% or more.

Answer 2

Paying off the cards is good, Closing the accounts as soon as they're paid off isn't so good. Here's why.

Part of your FICO score is based on your debt to available credit ratio. Let's say you have five accounts with a combined total credit line of 50K and a combined balance of 30K. You are using 60% of your available credit. Now, let's say you pay off the highest rate ones first (if you can); those have a combined line of 30K. You are now down to 15K of debt with a line of 50K, and you're using 30% of your available credit, a 50% reduction. That is good. But, if you close those two accounts, you are using 15K of your remaining available 20K, and now your ratio has shot up to 75%. Closing those accounts was a bad thing to do. Keep them open and be disciplined enough to not use them anymore.

A debt consolidation loan application will trigger another credit check, which will probably lower your score slightly, and if it's approved, you may not see an immediate increase in the score when you pay off the credit card debt. But if you can consolidate to a lower fixed rate than the rates on the credit card accounts, do it. You may have to wait a bit on refinancing the house, or if you can't wait, you may not get the low rates advertised, because of your score. At least you've seen the light and are being more responsible , and you'll eventually escape from the mess.

Answer 3

you should try refinancing your house and have them pay off that creditor for you... i have a great broker i can refer you to if you are interested... just send me a message... =)