My credit score is above 790. I am unemployed and receiving $450/week in unemployment insurance. I have less than $10k in savings and do not own a home. My car is 12 years old. My monthly expenses are $2,500. I owe $21K on 2 credit cards: $17k is at 0% interest until April. $4k is at 12.99% — it went up from 2.99% about 6 months ago and I haven’t been able to negotiate it back down.
How can I get my credit card debt reduced without significant damage to my credit score?
The only way to eliminate your credit card debt and not have it possibly reduce your credit score is going to be to pay it off in full either with cash or maybe a debt consolidation loan from a place like LendingClub.com.
But even then, applying for a loan and getting rejected may reduce your score.
You can’t live to chase your credit score. The score is not a calculation to show how skilled you are in managing your finances. It is a calculated formula for creditors to be able to spot people that may be of less risk to lend money to and generate the most profit.
I would argue that 790 is not really a truly reflection of your current credit score. It seems like you might be in a position right now where your income may not be sufficient to maintain your credit card debt without finding new employment.
If you are having to reach into your savings account to make ends meet each month, be careful. That’s okay for a couple of months but it is not a sustainable solution.
You’ll need to decide if your goal is to eliminate your debt or maximize your credit score in your current situation. You can’t have both.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
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