Getting out of debt should be your top priority. You should be thinking even more about getting out of debt if you have a bad FICO score. Many options exist for those who want to get out of debt as soon as possible. Even people with bad credit can find the help they need to solve their money problems. How do you get out of debt if you have a low credit score?
Take Steps To Increase Your Credit Score
You have opportunities to increase your credit score on your own. Something as simple as paying your current credit card payment on time is going to be an important first step.
Enrolling in a debt relief program is going to be the next step you need to take. Debt relief professionals can help you settle accounts that are past due. Even accounts that are currently in collections can be settled as well. Settling your accounts can increase your credit score by 100 points or more.
Paying your current bills on time combined with settling old accounts can significantly raise your credit score. This is because your accounts will most likely be marked as current on your credit report.
Having your accounts listed as current will negate a lot of the damage your past due payments have done. Your credit score could be raised by another 50-100 points.
Your credit score could easily go from 550 all the way up to 700 just by taking these simple steps.
Getting A Debt Consolidation Loan Is Hard With A Bad FICO Score
Trying to find a low interest debt consolidation loan is hard when you have bad credit. Debt settlement can likely reduce your principal balance without worrying about your credit. This might seem like a great idea for those who have had credit issues.
An equity line of credit could be something you look into. You can get a home equity loan for 4-5 percent interest rate. Your car could even be collateral for a loan. Auto title loans can be great for those who still have so-so credit even after attempts to repair a credit score.
You can still get an unsecured loan if you have poor credit but don’t want to go through professional debt relief. Bad credit consolidation loans are available for anyone who simply wants to organize their bills into one monthly payment. The 20-30 percent interest rate may still be cheaper than what you are currently paying on your credit card debt. But we do not recommend taking out another loan to consolidate your bills. Your goal should be debt elimination and debt settlement can help you achieve that.
What To Avoid While Getting Out Of Debt
Make sure that you are paying your debt off with money you have earned. Stay away from credit card cash advances, payday loans or any other high interest loan.
Consolidating your debt doesn’t make sense if you don’t save on the interest rate. Go straight to a credit relief counselor if you have to resort to those actions to consolidate your debt.
Pay all of your bills on time each month. Failure to pay even one note on time can have serious consequences. You may find that your creditors send your straight to court. Other consequences include having your interest rate increase to 30 percent.
Don’t take out any new debt. Taking out too many loans is what got you into this mess in the first place. Increasing your debt load could push you right to bankruptcy. Chances are your credit cards and other lines of credit may be frozen while you are taking care of your debt.
The bottom line is that there are ways to get out of debt if you have a low credit score. You first have to take baby steps such as paying your current payment on time as well as pursuing a debt settlement. This will allow you to eliminate your credit card debt now and then fix your bad FICO score. Once you become debt free, stop accumulating any more debt. Avoiding further financial hardship is your only goal.
Fill out the form right now to get more information on how you can get out of debt even with poor credit. Call today to speak to a representative about your options.