How Should I Best Use My Debt Consolidation Loan Money?


Dear Steve,

I just took out a debt consolidation loan, and I have a total of 7000 in credit card debt, a car note with 3700 still owed, and 5200 owed to IRS in back taxes.

I wanted to know how to spread the money around to increase my credit scores to buy a house. Thanks.



Dear Monica,

You didn’t mention how much you received in the debt consolidation loan.

However, I would suggest talking to a local mortgage broker and discussing what will be the most effective way to apply the available funds since the end goal is to apply for a mortgage.

We know what the end goal is and the smart thing to do is talk to the broker and understand what will make the most sense for you rather than guess.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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3 thoughts on “How Should I Best Use My Debt Consolidation Loan Money?”

  1. The IRS doesn’t report on a credit report. A car installment note paid regularly should reflect positively on your credit. You can keep that. You will want the balance on your credit card to be less than a third of the credit limit. For example $10k credit limit, balance should be $3300 or better yet less.
    Eric HELPS Nonrpofit Law Firm


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