loveit wrote:
I wlll keep this short. I need some advice on what to do or what not to do. Here is my situation:
Scores: tu 623, ex 683, and ex 665. I am looking to possibly refi my 80/20 loan. I pay appro. 1230 per month on a townhouse that I purchased 11 months ago. At that time scores were in 720 range. Scores Have taken a sign. hit this year- i guess due to my debt to income ratio. Other info: no baddies, no derog, etc. clean history with no bruises excpet for inquir. this past year after purchase. For whatever reason, I applied for every loan/ credit card I could think of. Long story but have learned the errors of my ways. Also I have 19,500 in revolving credit which is managed by debt management program and 75,800 in install. loans(school, car, personal loan) Yes, I know it looks bad- makes me sick to my stomach really. But I have made this mess and intend to clean it up. I Just increase payment on DMP so will be done in 25 months and car will be done in about 30 months.
My questions: sell townhouse and look for a cheaper place to live? Could I combine both loans for one payment? I really have alot of anxiety about my finan. future. I am only 29 and I don't think I handle any more. I am in over my hand. Thankfully I have a great job that pays well. Never been late and somehow manage to make it- just barely though. ANY thoughts, ideas are appreciated. Thanks!
Your FICO socre did not decrease due to your debt: income ratio, because income is not a factor in FICO scoring. Part of the decrease may be due to the number of inquiries in the past year. More importantly, what is your utilization on your revolving credit lines? Using too much of your available credit limits is usually what tanks the score.
DMP - please make sure they are really making the payments to the creditors and that those payments are on time. I've heard too many horror stories about agencies that pay late (if at all) which messes up your credit further.
Sell the townhouse? That's a personal decision. I guess it depends how much you could save. Don't forget to figure in closing costs on 2 transactions (if you buy a new place) -- that can add thousands of dollars into the mix.
Combine both loans? You can't borrow your way out of debt. It only is advantageous if you find a loan with a lower interest rate than all the debts on the DMP and the school loans, personal loan, car loan, etc. It's highly unlikely you'll get an unsecured personal loan at a lower rate to cover it all.
Sounds like you will have a lot of the debt knocked out in 2 years -- just stay with it, keep your expenses as low as you can, and you'll be OK.
