Credit Cards

[eddiemoney21]

Ok, I'm kind of baffled right now on what to do and am hoping to get some opinions and advice on here about this. Here is the thing...I have credit card debt amounting to about $10k. This puts me at about 60% util. What I would like to do is consolidate this debt into an installment account, but I can't seem to get a loan anywhere. My credit is in the low to mid 600s...I am thinking that my low score has to do with my revolving %, along with the fact that I filed for bankruptcy, but that was 9 years ago so I'm not sure if that even matters anymore. One more year and it'll be off my report. My average interest rate on my cards is about 15%. I have 12 of them and 11 of them have balances...Some small and some almost maxed.

So that's where I'm sitting right now...My question to all of you is do any of you know where I can get a consolidatation loan for this? I have a listing on Prosper right now for 10k @ 25% (3 year loan). Granted it would be an installment account, but would it even pay to do this if the % is higher than what my avg interest rate is on my cards at the moment? Also, my girlfriend and I would like to be in position to buy a house in a year so we are both working on lowering our revolving %'s and getting the most payments that we can off the credit bureau so we can qualify for the mortgage that we want.

Any help would be greatly appreciated! Thanks!

[shyboy]

i was in your shoes a few months ago. i owed about 2k on my crap1 so i join a credit union in the area and even with my limited credit history, they gave me a loan to pay it off. My result was that all 3 of my scores went up cause that was my first installment loans and it showed a mix of credit. The best thing i did was joining a credit union. They are so much easier to work with and understand average people that are trying to make life better for themself unlike those big banks. hope this helps

[jmbfl]

I, personally, would not move to higher APR's under any circumstances. It doesn't make any financial sense at all. Concentrate on paying down your balances. Use the "snowball" approach. Either start with the lowest balances or highest APR's and pay each account in turn. When you have paid off that TL do not use the card again except for a small charge which you PIF to keep the account active. This may require some austerity on your part for a while but the end result will be well worth it!

[eddiemoney21]

yea, i think that both of your replies help. i am going to look into a credit union and maybe see what they have to offer...i won't close my big bank (wells fargo) account though since most of my bills go through there and they are everywhere so making deposits and withdrawals is easier than say a credit union. also, i just went to bankrate.com and figured out what i need to pay each month to get each card paid off in the timeframe that i'm looking at so i'm going to stick with that too.

if anyone else has any advice i'd be happy to hear it! thanks for the previous posts too!

[smallfry]

Please do not take this the wrong way OP. I would pay down/off the credit card debt of $10K. If this is not possible I would have to wonder whether taking on the added burden of a house would be a wise choice.

[eddiemoney21]

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smallfry wrote:
Please do not take this the wrong way OP. I would pay down/off the credit card debt of $10K. If this is not possible I would have to wonder whether taking on the added burden of a house would be a wise choice.

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well that's what i plan on doing and what this message is about...paying down/off our cards at least getting below the 30% util mark before buying a house in a year.

[smallfry]

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eddiemoney21 wrote:

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smallfry wrote:
Please do not take this the wrong way OP. I would pay down/off the credit card debt of $10K. If this is not possible I would have to wonder whether taking on the added burden of a house would be a wise choice.

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well that's what i plan on doing and what this message is about...paying down/off our cards at least getting below the 30% util mark before buying a house in a year.

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I understand what you want to do. The BK is hurting you but you should be able to get loans with a BK that old. My point was if the 10K is that difficult to come up with to pay off the cards it is gonna be tight with a house and all the related expenses. Then again I have no idea what RE looks like in your area. I'm old fashioned and if I was in a position where I couldn't pay the cards off entirely i wouldn't be in the market for a house. Again its my opinion only please don't take offense. Flat market at best you won't miss anything by waiting till the BK drops completely since it will put you in a much better bargaining position. Good luck.

[eddiemoney21]

oh no i wasn't taking offense to it. i just was wondering if anyone knew of any internet sites or companies that i could get a consolidation loan from. i just can't understand why i can't get appproved for one...my credit isn't great, and my bk is 9 years out so from what i have heard that shouldn't matter...should be like it's not even on there, but then again i get decline letters back saying about my public record so obviously it's still part of the decision process for them. maybe i just need to wait it out...pay off my cards...save some cash...then get a mortgage. hopefully the market is in the same crappy place it is right now!

[jmbfl]

Of course the BK matters. It is a PR and it will report until it falls off, which will take every day of 10 years. As long as it reports it is there to be noted. That said, you need to get to a CU and start building a relationship. A CU is more likely to be BK friendly than any other lender. A finance company will not treat you very well. They don't treat anyone very well and you're sporting a BK.

Go to all your local CU's. Start with the largest and proceed in order of decreasing size. Print out and take with you all three of your CR's and tell them you are not authorizing a hard inquiry but are asking what they can do for you. Do not move to higher APR's. This makes no financial sense. Financial sense must win out over FICO sense. FICO is just a lenders tool for granting you credit. It is, however, YOUR MONEY!

You do present more than one problem, however. Yes, you do have a well aged BK. But you also have high total UTIL and a high proportion of cards reporting balances. All these things are hurting your FICO scores. You really are not going to have access to the best credit products until you get your total UTIL down -and- pay off a few of those cards. 11 of 12 reporting balances is just too many!

I would not be looking for a mortgage until that BK falls off. A BK stops being a showstopper for obtaining a mortgage after 2 years. However, you have a marginal FICO and any mortgage app will put your CR's under a microscope. They will be aware of the BK as long as it is there to see. Once it falls off they will never know about it, unless, for some reason you still have an account reporting as IIB. Also, you must watch all inq/new accounts within six months of app'ing a mortgage. Do not rely on the advice of a mortgage broker as far as cleaning your CR's is concerned. It is frequently defective. You will get better advice here.