“Hi Steve,
I am 36 yrs old, I have only one credit card and I am no longer using it and it has about a $20K balance that I am finally making progress to paying off. I am also now finally contributing to a retirement account and a savings account. All this is not easy but im making sacrifices
The question is – I have put this off for years but now I absolutely need a new roof for my house in a few months when it gets warm. That will cost somewhere between $5K-10K. I don’t have the money. What is the best way do you think to get the money for this as far as what kind of loan?? I was so excited that I am reducing my debt and now i am just going to create more debt again 🙁
Thanks Steve”
Dear George,
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Well it is certainly a financial liability until it is repaid but a new roof certainly sounds like a wise investment in protecting a valuable asset.
The obvious choices would be to try the typical places for a secured loan or home equity loan. Try your bank or credit union. Depending on your credit score it might also be valid to look into refinancing your current mortgage at a lower rate and take some cash out for the roof.
Outside of that you could turn to family or friends or maybe even a social lending group like Prosper.com, but you’d need good credit for the Prosper route.
Finally, there is always the thought of taking out a new credit card to pay for the roof. A credit card is a loan, albeit a sometimes very expensive and very high way to borrow money but if the roof is a ‘must have’ then you ability to be picky about where you get the money is limited.
Before you jump into any of these borrowing avenues I would strongly suggest that you follow this link to get a copy of your consolidated credit report (it is the one I use). You need a consolidated credit report to see what all the credit bureaus are reporting about you. On top of that, order your credit score as well. You need to know what your credit score actually is and if there are things you can easily do to improve it. The consolidated credit report with the credit score will tell you exactly what needs your immediate attention to clean up.
I don’t think I’ve looked at a credit report, including my own, in the last ten years that does not have incorrect information on it. That incorrect information, like listing accounts in collection that are not yours, or listing loans that are not yours, drags your score down incorrectly. An incorrect credit score, just five points too low can result in a higher interest rate or an outright rejection. Both of those consequences can be avoided by cleaning yourself up before making a credit application.
Put your best face forward, look over your credit report and credit score before you go on your lender date.
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