[hookguy]

Hey yall, I'm looking for some advise from those with experience or knowledge in rebuilding personal credit, paying off existing CC debt, all in preparation of buying a home later this year.

Quick run down... I have about 25k in CC debt, which has my credit utilization running too high. I have a cash bonus from working coming my way some point this year. The date is always a bit of a moving target but expected between June and Oct...

I have approval for 25k loan through a debt consolidation lender at 10 point lower interest than current CC but about 800 fee.

I say all that to ask, should I take the loan to wipe out my CC debt, pay off the loan in full with the bonus money within the next 6 months or less. My thought is this will allow time starting now for my credit score to begin rebuilding, and maybe the new loan aka a new line of credit will also help boost score, especailly once paid off?

Thoughts, advise, or otherwise?? Much appreciated all!

 

[hooknbullet2]

Don’t get a consolidation loan. Payoff the credit cards smallest balance to largest balance as fast as you can.

 

[Meadowlark]

Pay off credit cards highest interest rate first and then never again have a monthly balance carry over. Discipline. Live within your means. Then build up an emergency fund...enough to survive about 6 months.

 

[Hayniedude24]

Pay off credit cards highest interest rate first and then never again have a monthly balance carry over. Discipline. Live within your means. Then build up an emergency fund...enough to survive about 6 months.

This but leave a small balance on all of them. Maybe 5%. Use them, keep it to only having 3 or maybe 4 of them, but do pay the charges each month. It’ll build your credit score faster instead of zeroing them out.

 

[djwag94]

Don’t get a consolidation loan. Payoff the credit cards smallest balance to largest balance as fast as you can.

^
This!

From Dave Ramsey article.

You don’t need to consolidate, settle or borrow someone else’s money to deal with your debt. You just need to change how you manage your money. Did you get that? Your money will never change until you do!

https://www.daveramsey.com/blog/how-to-pay-off-credit-card-debt

BTDT, Good luck!

 

[cman]

Good advice above. Since you have high interest cards, have you looked at 0 percent interest card offers for first year to bridge the gap until your bonus and stop the interest?

 

[TXanalogkd]

As everyone has stated, negative on the loan to pay off another. At your age, now is the time to change your spending habits and the reward will pay off later. Trust me, the reward is a great feeling.

Peck away now with one CC at a time and I did I mention to change your spending habits.

You can do it.

 

[Muddskipper]

There is some advice that could be good here....but everyone’s situation is different

Besides taking advice from a fishing board..... go to who you are looking to get your mortgage from.... if your using a place that provides personal service they can advise you while looking at your credit
- they benefit from you getting your credit repaired faster

There is a mortgage broker down in Matagorda that has helped a ton of fisherman...with exactly what you posted
She used to have her business in Houston but moved down there....
She is awesome to work with ... pm me and I will shoot you her info

 

[basseditor]

It seems daunting at first. To clear debt is good thing, but be disciplined about it. Posted above were two strategies 1) start with highest interest card or 2) take lowest balance, pay it off as fast as you can, then use that payment coupled with your regular payment of the next card. As you knock off the smaller balances, you can apply more and more to the next smallest. Don't close the accounts. That hurts if you are trying to get a big loan soon. Use the paid off ones carefully, but use them. A tank of gas, or any small amount really for day-to-day purchase you have to make anyway. Pay it off as soon as the account rolls into the next period. It helps to have small balances that are paid on time for credit scores. If you want to be totally debt free, and don't need to make a big purchase on credit, then pay them off and don't use them. Close the accounts one by one over time. It took me several years to learn the tricks of the credit industry. I'm not a financial advisor so I'm relaying my experience.

 

[Stumpgrinder1]

be successful before you look successful. I wish someone had branded this in my mind about 35 years ago