Settling open credit card debt - FICO

[thathouseismine]

Thank you for all the information everyone! I really appreciate it. 

so from what I understand, settling a debt is no different than a charge off. 

how about I pay off BofA 42k plus bofa 6k and for the rest I get a debt consolidation loan? I believe my credit score will be around 750s if I pay off 48k according to experian simulator. 

this will leave me with enough cash in hand and lower interest rates 

[coldfusion]

Don't put full faith in what simulators tell you.

What you propose could be beneficial if there's a sufficient gap in the consolidation loans' interest rate vs. those of the remaining cards to make it worthwhile. 

[SouthJamaica]

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@thathouseismine wrote:

Thank you for all the information everyone! I really appreciate it. 

so from what I understand, settling a debt is no different than a charge off. 

how about I pay off BofA 42k plus bofa 6k and for the rest I get a debt consolidation loan? I believe my credit score will be around 750s if I pay off 48k according to experian simulator. 

this will leave me with enough cash in hand and lower interest rates 

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I don't see why you should take out a loan. You're not strapped, you have enough to pay off all of your debt.

You should just pay down or pay off your credit card debts.

[GreatLife]

With no lates or derogs, and ample savings you should have some decent options.

I would probably have a backwards approach and start by contacting a mortgage company like Rocket Loans. Let them do the work of figuring it out for you. They'll gather your income/debt/CR/asset info, then underwriting can assess everything to present you with options on what to do for mortgage optimization. Instead of guessing you'll have some details to help with your decision making.. mortgage down payment amounts, DTI requirements, debt settlement yes or no impacts, etc.

You won't be obligated to use that particular when ready to do an actual mortgage.

[AndySoCal]

@thathouseismine  if you choose to debt consolidation loan route. In the past I heard that some lender(s) will want the credit card(s) that in the debt consolidation loan closed as a part of the loan. I.E. The lender pays the credit balance owed on the credit card with ABC Bank. After that payment is completed the account will be closed per the terms of the loan.  I do not know if this is true for all debt conolidation loans.

Here are two credit unions that offer them. There are more than these two just seach credit union debt solidation loan.

If you are already a member of a credit union you may want check with them to see what they can do. If not here are two examples

https://www.penfed.org/personal-loans/debt-consolidation 

https://www.affinityfcu.com/personal-banking/borrow/loan/debt-consolidation-loan 

As always do your research and ask questions before you make any decision. Doing what you suggested in paying the two cards will help your scores and give you a little breathing room.

[Lou-natic]

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@AndySoCal wrote:

@thathouseismine  if you choose to debt consolidation loan route. In the past I heard that some lender(s) will want the credit card(s) that in the debt consolidation loan closed as a part of the loan. I.E. The lender pays the credit balance owed on the credit card with ABC Bank. After that payment is completed the account will be closed per the terms of the loan.  I do not know if this is true for all debt conolidation loans.

Here are two credit unions that offer them. There are more than these two just seach credit union debt solidation loan.

If you are already a member of a credit union you may want check with them to see what they can do. If not here are two examples

https://www.penfed.org/personal-loans/debt-consolidation 

https://www.affinityfcu.com/personal-banking/borrow/loan/debt-consolidation-loan 

As always do your research and ask questions before you make any decision. Doing what you suggested in paying the two cards will help your scores and give you a little breathing room.

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The key is to take a loan and not tell the bank you're taking the loan with that the money is to pay off your debts to other Banks.