Thankfully, there are now several web sites that are there to help people like you with bad credit to find the fast personal loans that you need. When you have bad credit, the first thing that you should be looking for is a loan company that If your financial problems have reached the point where you do not see a way out and you feel as though you are drowning in debt, your best way out is through declaring bankruptcy. Filing may well allow you to get your finances back on track
Chosen by voters as Yahoo's "Best Answer", you may find this advice extremely helpful to you as well. Here's the original question: "My husband and I have high credit scores and are not behind on our bills. But are overwhelmed with the amount of debt we carry, credit card debt that is. Should we resort to debt settlement or continue to make minimum payments for the next five years. At this point we can only make minimums.Great question! The answer depends on your situation, your goals and what's most important to you.Let's start with your situation...The fact that you have high credit scores and have not fallen behind means you have something to lose (your perfect payment history) if you choose debt settlement.While debt settlement has a negative impact on your payment history (more so if you've never been late, not so much if you've already fallen behind), debt settlement also has a POSITIVE AFFECT on your debt-to-income ratio and utilization because the accounts are paid to a zero balance on your credit report. You can also do credit repair and credit rebuilding (usually within 6-12 months) after you complete debt settlement.Let's first get clear about exactly how your credit will be affected. The other two important areas of your credit are your debt-to-income ratio and utilization and both are greatly improved through debt settlement.How Important Is Your Credit Score?Remember, credit "score" is not everything... Credit "worthiness" (your ability to get a loan) is more important, especially long term.A question to consider is this: What do you need your credit for? Most keep their credit in good shape so they can get into deeper and deeper debt, only to pay more and more interest.But Is Your Credit Really Even "Good" Right Now?Having a perfect payment history (about 35% of your credit) and a good credit score is nice, but other factors could be crippling you.Let's take a lookDebt-to-income ratio (DTI) is the amount of money that you're obligated to pay each month towards your debt. Take the payment due on every bill you have and divide it by your net income. Example:Mortgage - $1450, Utilities - $300, Credit Cards - $600, Autos (payments and insurance) - $1200, Student Loans - $300. The total is $3850. If this person's net income (after taxes) is $6,000, his DTI is approximately 64%, and he is in very bad shape if he needs to borrow money. If, on the other hand, his monthly net income is $24,000, his DTI is only 16%. This is a great place to be!If you can keep your DTI ratio at or under a third (33%) you will be in a great spot with lenders. Over 45-50%is crippling to your credit, regardless of credit score, because you simply cannot afford any more debt. This means you are not "credit worthy."If your debt-to-income ratio is too high now, then you're basically crippled, and concerns about debt settlement affecting your credit simply don't make any sense because your good payment history has only gotten you into so much debt that lenders will no longer extend you any more credit. Many people find themselves in this exact situation.Credit Limit vs. Current Balance - The least known factor in CreditThe third area of your credit to consider is your "utilization" or "debt-to-credit-limit ratio". The way this works is very interesting. This is probably the least known factor that affects your credit, but is just as important as payment history to your score.Each account you have has a credit limit and a current balance. If that current balance is less than 50% of your credit limit, that's a positive factor. If you have an account that's over 50% "utilized" (balance over 50% of the limit), then it's a negative factor and bad for your credit worthiness. If your balances get to the limit, or over the limit, then this is a crippling factor to your credit.Take a look at your accounts... is any balance over 50% of the limit?Keep these three factors in mind when evaluating your credit worthiness: payment history, debt-to-income ratio and utilizationWhat's The Big Idea?Most of the time, worrying about your credit rating when you're drowning in debt is like worrying about how your front yard looks when you house has just burned to the ground.I don't know how much debt you have or what your interest rates are. These are critical factors in your decision.Most important is this, the "BIG IDEA": STOP paying interest and START EARNING interest, ASAP! This is critically important if you ever want to retire, and makes all the difference between a life of wealth or a life of slavery (seriously).Why Credit May Be important, But CASH Is KingYou mentioned paying minimums for the next five years. If you could pay off your debt in 5 years with minimum payments, then:a) you have a small amount of debt and low interest rates, and b) you don't have enough debt for debt settlement.Take a look at the cost and time it takes to pay off debt with minimum payments if you are paying what the average American pays in credit card interest...Debt (Pay Off Amount, Principle & Interest, making Minimum Payments) Number of years to pay off making minimums at 19%:
- $10,000 ($26,276.59) 42 years, 9 months
- $20,000 ($74,464.22) 53 years, 3 months
- $30,000 ($112,651.77) 59 years, 4 months
- $40,000 ( $150,839.39) 63 years, 6 months
- $50,000 ($189,027.02) 67 years, 1 month
- $70,000 ($265,402.22) 72 years, 2 months
- $100,000 ($379,965.06) 77 years, 7 months
- $150,000 ($570,903.04) 83 years, 8 months