Debt Consolidation can and will ruin your credit!
Yes, Debt Cosolidation isn't a good idea and I'll tell you why. I've done research of my own and found out some disturbing information.
You've seen those long drawn out commercials full of promises to get you out of debt. They use words like...
Debt reduction - The perfect guide
Many people may say that the process of debt reduction is
common sense and obviously, the best way to handle your finances
is to pay with cash.
Just because you have incurred debt, doesn't necessarily imply
that you've mismanaged your...
Getting a Debt Consolidation Loan with Bad Credit
If you've ever tried to get a debt consolidation loan with bad credit, then you know that it isn't always easy. It may seem odd that you can have such trouble being approved for a loan designed to help people who are in debt, but many lenders can be...
Nurse your credit rating with debt counseling
The most important first step you should take is to admit that you have a financial problem. As soon as you do that, you have taken a very big leap towards positive debt counseling and will soon recover from your debt problems. As they always say,...
Pay Off Your Student Loans and Reduce Your Debts
Financing a college education is one of the more expensive debts you may incur. Student loans can take years or even decades to pay off. Making late payments or missing payments all together can result in a poor credit rating and collections on...
Learn How To Fix Your Credit & Debt Problems - Before Buying Your Next House!
Most people think - mistakenly - that if you have credit problems, you have to wait 7 years for them to go away. Well, that's not always true.
Credit repair can help you...once you know how to do it. The time to clean up your credit and pay off your debts is RIGHT NOW, before you start looking for houses and applying for mortgages. Cleaning up your credit and lowering your debt will help you:
* get a better interest rate
* borrow more money
* and save lots of money in interest
Clean Up Your Credit Report
These days, getting credit is easy. Unfortunately, so is getting into debt or financial trouble.
But just because you've had some money problems does NOT mean you can't get a mortgage and buy a house. There are all kinds of loans:
* loans for first time homebuyers
* loans for people with bad credit
* loans for people with perfect credit
* and loans for people without a lot of money for a down payment
So, most people can get a loan these days. The question is, HOW MUCH will you pay in the long run for higher fees and interest rates?
A lot of people think that if something bad goes on your credit report, that it must stay there for 7 years, or longer. But that's not always true. Credit repair can work, if you know how to do it.
And, you can do it yourself.
For example, I had lots of debt (from a business idea that did not work) and got a lot of bad credit listings while getting myself out of debt.
And within 6 months of paying off my last credit card bill (remember, even if you have some debt you might still be able to get a house loan) I repaired my credit to the point that I got both a car loan and a mortgage. More importantly, I got the LOWEST POSSIBLE interest rates, which over the life of a 30-year loan could save me tens of thousands of dollars!
How did I repair my credit?
I got a copy of all my credit reports, and kept writing letters asking the credit bureaus to remove the bad credit.
So it CAN be done. (And I had some pretty bad stuff on my credit reports.) The worst that can happen is that the credit bureaus can say "no" to your request. The best that can happen is that your credit score will improve, and you'll pay a lower interest rate, get a bigger mortgage, or both!
So, how do you clean up your credit report?
The first step is to get a copy of your credit report from the 3 credit bureaus, listed below. You might have to pay a few dollars, but it is well worth it. If you moved, changed jobs, and had any other personal info change recently, you can send it to the
The next step is to circle or highlight the bad credit items, and write a letter to each credit bureau asking them to remove the item. If you have a lot, focus on one or two at a time.
Then, wait a month or two, and ask for another one or two items to be removed.
It might take a few tries.
But if you keep trying, eventually most (or all) of the items will be removed.
In the worst case - even if you only get a few removed - it might still improve your credit score, reduce your interest rate, and lower your monthtly payment!
So don't give up.
It might take a little time to repair your credit - especially if you've had quite a few money problems. But every little bit helps your credit score, your interest rate, and the amount of money you can get.
Then Pay Off As Much Debt As Possible
I know, when preparing to buy your new home money is real tight. But if you have any extra money - any at all - try to pay off as much debt as possible. This will help you:
* Be more likely to be approved for a mortgage
* Be able to borrow more money
* Have one (or more) less bill to worry about once you start having to pay a mortgage every month.
If you can't pay off your debt, you might want to consider waiting before buying your new home. Or, look into a debt reduction program that can help you get out of debt faster.
There are no rules that say you can't have some debt and still buy a house!
But think very carefully about your financial situation. And TRY to pay off as much debt as possible before buying a house. There is enough to worry about as a new homeowner, without having to worry about paying your credit card bills.
At the very least, if you do have any debt, MAKE SURE you can comfortably afford to pay your credit card bills as well as your mortgage, before getting started! About the Author