How to Consolidate Bills with a Weak Credit History
You’re trying to do the responsible thing and consolidate bills but a weak credit history is holding you back from qualifying. You still have an opportunity to qualify you may just have to go about it from a different angle. There are a couple options you can consider that will help you to consolidate your bills and improve your credit simultaneously (beyond just getting any of the loans for people with bad credit out there).
If you only your own home and have available equity consider using it as collateral. Homes are one of the banks favorite types of collateral as they generally hold their value which is one of the most important things to have in collateral. Be wary of lenders that will advance you more than 100% of the appraised value of your home as he eased types of lending instruments have a higher expectancy to be defaulted on. You may either rework your present mortgage or home loan or look into a second mortgage or line of credit secured by your own as the possible lending product options. If this option doesn’t work then you may have to use the second option to help you get your consolidation loan.
Another option is to secure a cosigner with a solid borrowing profile. This means they would have a good income, ideally the same job making a salary of the same amount for more than two consecutive years at the same company. Additionally, they would have the ability on paper to support your consolidation loan if you defaulted. The bank will view a cosigner application, often approving it based on a cosigner by themselves, on a worst-case scenario basis. They’re looking to see where they would stand if the co-borrower was left to support the loan on their own. This is how banks evaluate lending risk which is the primary factor in their decisions to grant credit. Many people don’t consider using a cosigner when they have trouble getting a loan by themselves. The prospect of asking somebody to help you cosign your credit application is embarrassing to many and can be a matter of pride. It’s also important to understand the risk that a cosigner is taking on by backing a loan for a person with bad credit. In the end you may have to ask more than one person as many people are unwilling to risk their credit for anyone.
These are a few options to help you get the money that you need and consolidate your bills while having weak credit. Unfortunately many people that experience bad credit don’t always turn over a new leaf and vow to protect their credit in the future. In the end having bad credit can cost thousands of additional dollars in boring costs so it’s really important that one protects their credit and sees it as the investment it is. To consolidate bills is only one step in a large picture.
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I have debts totalling $3,386.00 and I presently have income of $1429.00 on CPP and OAS. I will have an increase in CPP in Jan, 2011 as I will be 65 yrs in Jan. I also have 1 year left to pay on my vehicle. I want to know if it is possible to get an unsecured loan.