Any Personal Loans or Debt Consolidation Loans for Good Income but very Bad Credit Score 559?

[tavisbryant]

Hi there, I'm wondering if anyone knows of a lender that takes income in to consideration over credit. I went from making $120k a year to $30k 3 years ago. During that time 2 medical expenses totalling $19k and 3 credit cards totalling $9k are currently in collections and my credit score dropped to 559. I also have a $12k student loan that's past due and close to collections but they are postponing payments on that and I think I can continue payments regularly when they're due.

One of the big issues I'm having, is my family and friends pretty much carried me for two and a half years when I was making $30k to keep me from losing everything. So I owe them about $60k and most of my paychecks go to paying them off. But lenders don't know about that. I

But late December I got a pretty good job again and back to making $125k verifiable income and $10k of expected dividends for the year. So $135k. But I can't get anything. I mean I can't even get a $500 payday loan or $1000 line of credit. I'm trying to get $25-$30k debt consolidation loan. 

So basically does anyone know lenders that are income based instead of credit based because I simply won't pass any credit criteria. And I understand this is all my fault but I'm working to get out of it. The other question is will paying off the collection items with a debt settle loan be a good thing for my credit score? Thanks for the help.

[MileHigh96]

That might be tough with that credit score. Have you tried going through a place like Lending Tree that sends your information out to multiple lenders? That's where I got my first loan post BK and I got it from Lending Club through Lending Tree. Granted, it wasn't nearly as much as you are looking for (mine was only for $3K), but it might be worth a try to see if they come back with any pre-approvals for you.

You could also try and see if Credit Karma has any pre-approvals for you as well.

Good luck!

[difringe]

Upstart looks at income and other stuff in addition to credit score, and they have a prequalification tool, so that might be a good option for you. Good luck, I've had success with scores in the mid-600s, but mid-500s...might be dicey. If you have low reported DTI ratio, you may be able to find a credit union to help you? Penfed has a prequalification tool as well, I'm not 100% sure how solid it is though.

[sportsguy83]

I second the Upstart recommendation.  They look at more than just credit score but with that score it still might be tough.  I was able to be approved for a $36k loan with low 600 credit score but I didn't have many negative items on my profile (just very high utilization).  They were literally the only lender that I could get a loan with that had a somewhat decent interest rate.

[SouthJamaica]

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@tavisbryant wrote:

Hi there, I'm wondering if anyone knows of a lender that takes income in to consideration over credit. I went from making $120k a year to $30k 3 years ago. During that time 2 medical expenses totalling $19k and 3 credit cards totalling $9k are currently in collections and my credit score dropped to 559. I also have a $12k student loan that's past due and close to collections but they are postponing payments on that and I think I can continue payments regularly when they're due.

One of the big issues I'm having, is my family and friends pretty much carried me for two and a half years when I was making $30k to keep me from losing everything. So I owe them about $60k and most of my paychecks go to paying them off. But lenders don't know about that. I

But late December I got a pretty good job again and back to making $125k verifiable income and $10k of expected dividends for the year. So $135k. But I can't get anything. I mean I can't even get a $500 payday loan or $1000 line of credit. I'm trying to get $25-$30k debt consolidation loan. 

So basically does anyone know lenders that are income based instead of credit based because I simply won't pass any credit criteria. And I understand this is all my fault but I'm working to get out of it. The other question is will paying off the collection items with a debt settle loan be a good thing for my credit score? Thanks for the help.

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Yes it would be a good thing for your credit score.

Unfortunately I don't have any bright ideas for the debt consolidation loan.

[tavisbryant]

Thanks for the heads up on upstart. Seems like I have some traction there and some options. APR is high. I have two calls with some national debt consolidation places today. One had a nice setup where they listed off all my debt and said what they'd pay and what my monthly payment would be fore it. They also ask how much I'd be willing to allow them to pay which I said $20k of the $25k. So we'll see what they say there. My credit is simply a giant red flag. I still can't believe most places I can't even qualify for $500 or I can't even get a $1000 credit line. It's like income to credit ratio is absolutely meaningless, which is strange to me. But oh well. Thanks for the help. I'll let you know how the debt consolidation calls go.

[SouthJamaica]

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@tavisbryant wrote:

Thanks for the heads up on upstart. Seems like I have some traction there and some options. APR is high. I have two calls with some national debt consolidation places today. One had a nice setup where they listed off all my debt and said what they'd pay and what my monthly payment would be fore it. They also ask how much I'd be willing to allow them to pay which I said $20k of the $25k. So we'll see what they say there. My credit is simply a giant red flag. I still can't believe most places I can't even qualify for $500 or I can't even get a $1000 credit line. It's like income to credit ratio is absolutely meaningless, which is strange to me. But oh well. Thanks for the help. I'll let you know how the debt consolidation calls go.

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Best of luck with it.

[difringe]

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@tavisbryant wrote:

Thanks for the heads up on upstart. Seems like I have some traction there and some options. APR is high. I have two calls with some national debt consolidation places today. One had a nice setup where they listed off all my debt and said what they'd pay and what my monthly payment would be fore it. They also ask how much I'd be willing to allow them to pay which I said $20k of the $25k. So we'll see what they say there. My credit is simply a giant red flag. I still can't believe most places I can't even qualify for $500 or I can't even get a $1000 credit line. It's like income to credit ratio is absolutely meaningless, which is strange to me. But oh well. Thanks for the help. I'll let you know how the debt consolidation calls go.

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I will say just be careful with those debt consolidation places, I'm always hearing about scams in that field/how they don't help you as much as you think. With Upstart, Upgrade, etc. your account will have that Consumer Finance Account flag, but at least when you pay off your collections and such, there won't be any funny business with that. I can't speak to how reliable the debt consolidation places are, never tried one.  I wish you the best of luck, I've definitely been somewhere adjacent to where you are now.

Edit: Also, regarding how income doesn't matter as much to these ppl when extending credit, I think you should think of it like...basically you're building a credit reputation. You made good money in the past, but due to circumstances beyond your control, you ended up with multiple accounts in collections, so your credit reputation is poor. Even though you're back to making good money (which again, congratulations on that and clearly you're working your ass off!) that doesn't speak to your past ability of keeping up with your obligations, which is basically the purpose of credit evaluations, and why those places don't really care much about how much money you make now.

That being said, there are now fintech companies (like X1 for example) that are looking at this stuff in a different light, in a way that tends to favor higher-income customers...but with the current collections, I'm still not 100% sure that they'd lend you credit/provide a loan with the apr that you're looking for.

[tavisbryant]

Just got off the first call with what I thought was a debt consolidation place but it's more debt settlement and I'm not liking what I'm hearing. They don't actually pay the debt off, they just negotiate a settlement and I pay a monthly charge for them to pay those settlement charges. That includes taking my current two credits and intentionally defaulting on those in order for them to settle. I don't even want to settle really, I rather pay the full amount since that's what I borrowed and was hoping a debt consolidation could do all that to get rid of the collections and the high interest rates along with giving me some cushion money while I pay off all my other debts all giving me just one nice easy payment each month. I can dream at least. Really put myself in a debt jam with some dumb decisions.

But oh well, I'm making the income to get out of it at least just going to be a long process and hopefully those collection items don't get charged off. My friends and family are obviously pretty leinant but it's been years now that I've been borrowing money from them so I almost feel obligated to pay my friends back first, then collections, then family. But I might have to tell my friends I have to do collections first. 

What do you guys think of the debt settlement proposal? Doesn't sound too enticing to me. 

[difringe]

Personally, I would absolutely avoid the debt settlement proposal.