What to do when options are few
Welcome back to “Repair Your Credit.” CLICK HERE if you missed part three of this article on how credit repair and a lessened dependence on payday loans in Wyoming can help you to keep your financial boat afloat.
As you look at your balance transfer options, isolate the best offers and apply for them first. I’m talking lowest APR or no APR for the longest period of time, of course. This is important because inquiries made on your credit history will appear on your credit report and have a negative impact upon your FICO score (if there are many inquiries, in particular). According to the business world, your FICO score is THE indicator of your credit worthiness. Thus, you want to make the best debt consolidation choices possible to repair your credit.
Revisit the results
Once you have found a good, low-interest balance transfer candidate for consolidating your debts, go through the application process. After approval, go back to the payment calculator and determine your savings in both time and money over the life of the debt.
If the ship is sinking
If you have missed several payments resulting in a low credit score, you may not be able to take advantage of the low interest balance transfer options. But all is not lost!
Credit card companies still want your business. But a poor credit history may prevent you from creating new accounts with other creditors. They will view you as a risk. They only want your business under two conditions:
- That you have some reputable credit and
- That you currently owe them money.
The second is what you will need as leverage. Because your creditors may not be happy with your payment history, but as long as you owe them money, they are willing to do some surprising things to get some – if not all – of that money into their coffers.
Negotiating with your creditors
Oftentimes, if you are defaulting on payments, creditors will be willing to negotiate a settlement with you. Keep in mind that they must have some evidence of good faith on your part. If you’re too far behind and the balance has grown too high, you may be out of luck here. However, if the mountain is still climbable, creditors may begin to focus more on what they can get back rather than how much you still owe.
Credit debt can often be negotiated down to 25 to 50 cents on the dollar. In other words, if you have $50,000 in credit card debt, a successful recovery negotiation could bring that down as low as $12,500. Think of how much this would decrease the financial stress in your life! You can’t depend upon creditors being amenable to such a change, but if you find yourself in a credit nightmare, it pays to try this strategy out. Be aware, however, that there are some catches when committing yourself to these negotiations. CLICK HERE to read on!
