Consolidating credit cards with bad credit
But beware of the numerous scams and fraudulent companies out there; they could put you in a worse financial situation than you’re already in.Take the proper steps to ensure you work with a legitimate, trustworthy debt consolidation company.Another option is to shop for a personal loan online.Just make sure you are dealing with a reputable company and/or website, since there are a lot of cyberscams designed to get your personal information.
However, P2P lenders are still wary of borrowers with poor credit scores and adjust their interest rates accordingly.
Even though your plan may be to use the new loan to pay off your other debts, and then pay the new loan off as fast as you can, the new lender is wondering what will happen if you consolidate and pay off your credit cards, and then run up new balances.
In addition to your debt, your payment history will be a major factor in terms of whether you get approved.
If your credit reports list late payments or other negative items like bankruptcy — especially in recent years — it will be harder to get the loan you need.
To increase your chances that you are able to get a consolidation loan, you will want to first check your credit reports and credit scores to see where you stand.
Debt-to-Income Ratio: Lenders will ask about your income in your application and typically compare your monthly payments on all your debts to your income.