What are your chances of getting additional credit while still in debt consolidation?
Friday, December 4th, 2009 at
9:42 pm
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Tagged with: Consolidation Debt • Credit Consolidation • Credit Debt • debt consolidation program • debt program • student loan
Filed under: Money Saving Tips
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Not terribly likely. The debt consolidation plot will most likely "ding" your credit and mark it as being that of someone who is using a debt consolidation plot. Because many of these debt consolidation plans work by negotiating the owed amounts down to a percentage of the total money owed, then paying them off, most banks don’t like them. So if you have chosen to go through one to pay your debt, the deals you may find really might not be that fantastic.
Furthermore, the more credit exploration you have on your report requesting credit, the worse it looks with a heavy debt load.
If you need the credit you’re seeking to fix/buy a car, consider just going to an auction, or just driving a beater for a while. If the one you’re in is giving you expensive problems, you can always find an ancient, cheap Toyota, Honda, or VW something that will run until the wheels fall off for about 2-3K. Even if you don’t have it, an extra minimum wage job scrupulously saved will get the job done. You don’t have to drive it forever; just until you get out of debt. Also, you should shop around for parts and mechanics as prices vary widely. I have establish some really nice stuff on the Internet.
I can’t reckon of anything that one would say they NEED credit for other than a car or car repairs. You may WANT credit for something, but I bet that you can find another creative, inexpensive way to solve your problems. The end goal of debt consolidation should be to get out of debt, not to deal with more. So I encourage you to try to function without credit for a while. It’s not impossible, and though it’s hard for a while, you really will be surprised at how quickly your load lightens up when you get into the habit of paying cash for everything.
There was a time in my past when I visited a consumer credit counseling agency to help me with my debt. I saw their pitch and I realized something. I could pay my debt without having to do their plot. I owed a lot >30,000, but I realized that if I worked hard and sacrificed, I could make it. So I didn’t sign up for their plot; I made my own. I called up and establish out how much I owed from all of my creditors (painful) and I didn’t let them yell and scream at me. I promised them nothing and told them that they could only contact me by mail from then on. First I saved about 1500 dollars cash, and place it in a savings acct in an online bank that I do no other business with. I added 100 dollars to it each time I get paid. (When I wasn’t able to contribute that much to my savings, I added 10 percent of my earnings off the top of each check) I then made a list of the debts, and paid the smallest debt amount first, while making minimum monthlies on the rest. I paid it off absolutely, and didn’t ever pay by giving the companies access to my checking acct. (I sent money orders from Wal-Mart) Then I took the amount that I paid on that debt and added it to the minimum monthly on the next debt. That in turn, paid the second debt off that much more quickly. I also adjusted my lifestyle. I gave away and sold some clothes that were too small/ancient/not wanted any more. I got rid of the "excellent cable and cell phone plans" and got much more basic stuff. I took a second job at night.
I should mention that my car’s transmission died on me about nine months into all of this. The dealership wanted ~5600 to get me a new one. When I stopped panicking, I called around and establish someone who was able to do the work for about 800. I really called a dealership two states away who sold me a new transmission for 1300. They shipped it to my mechanic, who dropped it in. I rode the bus for 10 days while my new transmission was paid for, shipped, and dropped into my car.
That was only possible because I had my seed money to start with. I started over, saved my 1000 emergency acct and started to contribute to it biweekly.
Doing all of this allowed me to pay the 30K off in just over 1.5 years. 20 months of that kind of living allowed me to get rid of a lot of debt, but I am so free now.
Whatever you choose to do, I will you the best. Excellent Luck!