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New Member
2manycards
Posts: 6
Registered: ‎01-27-2009
0

Consolidation Loan for credit cards

Will a consolidation loan for my credit cards lower my credit score?  I'm at 721, and I have $57,000 in cc debt!
Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008
0

Re: Consolidation Loan for credit cards

What kind of loan are you contemplating (home equit, etc.)?

Credit Scoring 101 - Tuscani   *  Guide to Common Abbreviations
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09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549
New Member
2manycards
Posts: 6
Registered: ‎01-27-2009
0

Re: Consolidation Loan for credit cards

I'm pretty sure I know the answer, but just need to hear it again!  Is there a debt consolidation program besides home equity that doesn't affect your score?  I don't care if they close my accounts, I just want to start paying getting rid of the debt but keep my 721 score.
Epic Contributor
Creditaddict
Posts: 20,891
Registered: ‎10-23-2007
0

Re: Consolidation Loan for credit cards

no, debt management is very much going to effect your score.

personal loans IF you can get one, probably won't go above 20,000, so that would leave home equity loans. 

Fico Scores: EQ- 682 DCU, TU 696 Walmart, EX 695 NASA(10-6-14)
You will have to put up Electric Fence to keep me in the garden!
Highest Limit: Navy Federal Cash Sigi Visa $50k (AU)
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Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008

Re: Consolidation Loan for credit cards

If you are rereferring to a Credit Counseling type "consolidation" then yes, your credit is going to take a major hit. It might not be as bad as BK, but it isn't much better, credit wise.

There are credit repair services, and they don't do anything that you cannot do for yourself. And just like credit repair, you can also do the same thing for yourself that these "credit counsel" consolidators can.

If you want to keep your score then do this:

1. Put your credit cards in your home safe or sock drawer (or cut them up if you can't resist temptation)
2. Use the Dave Ramsey "snowball" payoff. Pay your minimums, but pay extra (as much as you can) on your lowest balance card.
3. Once the low balance card is paid off, begin paying everything you were paying to that card to your next lowest balance on top of the minimum you were all ready paying.
4. Repeat this process.
5. Sacrifice the luxuries so that you can pay as much toward debt as you can. I suggest getting a hobby that you enjoy, that doesn't cost as your R&R. Postpone going out to eat and other non-essentials (amazing how much they add up to)
6. Contact your CCC's and ask about waiving any Annual Fees. Also request an APR reduction. You never know till you ask.
7. Get a part time job, if possible, to add to your ability to pay toward your debt.
8. Have a garage sale and/or use Ebay to sell off any old junk and unused or unneeded items to raise cash to pay toward CC's. You would be amazed, many people have hundreds and sometimes thousands of dollars raised this way.
9. Make this a mission (include your significant other so that there isn't dispute). Visualize the joy and qualify of life once you are debt free. Also imagine what your FICO improvement will be!
10. Get on a good exercise program and healthy eating. WHAT? Yep, people report that when they begin improving themselves and their finances that it provides high levels of satisfaction and increased success. Success begets success, plus this is one of those free stress relievers.

The main thing: you have to be committed. BK and credit counseling consolidation are not the answer much of the time. They are sometimes used to give up. Now this is not saying BK is not necessary sometimes (don't anyone take it wrong). I'm just saying, BK will punish your score and your ability to enjoy credit for some time and so will credit counseling consolidation.

Credit Scoring 101 - Tuscani   *  Guide to Common Abbreviations
Frequently Requested Threads * FICO High Achievers  *  FICO Score Estimator


09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549
New Member
2manycards
Posts: 6
Registered: ‎01-27-2009
0

Re: Consolidation Loan for credit cards

Thank you!
Established Contributor
YoungEntrepeneur
Posts: 586
Registered: ‎03-03-2009
0

Re: Consolidation Loan for credit cards

Many lenders are offering hardship programs right now. Have you looked into them?
Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008
0

Re: Consolidation Loan for credit cards

If I understood the original post, he was trying to preserve his credit and score.  Any type of negotiated, credit counsel or "hardship" program may impact credit or score.

Credit Scoring 101 - Tuscani   *  Guide to Common Abbreviations
Frequently Requested Threads * FICO High Achievers  *  FICO Score Estimator


09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
03/28/2009 TU: 814, EQ: 810, EX: 781 (02/12/2009)
05/18/2005 TU: 563, EQ: 580, EX: 549

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