I Have Great Credit, Never Missed a Payment, And Want to Get Out of Debt ASAP. – Bonnie


“Dear Steve,

I have a large number of credit cards and a lot of credit card debt. I have never missed a payment and currently have a FICO score of 736. I want to pay down my debt and possibly consolidate my accounts into one payment.

I think my debt is approx $60,000 and I have an mortgage and an income of $104,000 a year. My husband is employed and he is making approx $30,000 a year due to Chrysler and the reorganization of the dealership he works for. Is getting an consolidation loan and paying off my creditors a good idea, and then approx a month or two closing the accounts?


Dear Bonnie,

The right answer depends on what you feel is most important to you, your credit score or getting out of debt.

To protect and improve your credit score you can’t go into a debt management solution or bankruptcy. So that leaves paying off the debt as agreed or with some type of loan.

However, I want you to recognize that you can’t borrow your way out of debt.

Your best source for a loan to pay off your debt is going to be a home equity loan or to refinance the house to take cash out to pay off the debt. In that case, as long as the loan is less than the value of the house the interest you’ll pay on the new mortgage will be deductible.

But, keep in mind that a new larger mortgage will result in a higher payment for you and if you can’t make that new payment you could lose the house to foreclosure. The rule of mortgage is, you’ve got to pay to stay.

If you are looking for an unsecured debt consolidation loan, yeah, those really don’t exist anymore.

if you don’t have any problems making the minimum payment, you don’t mind if your credit takes a little hit and you’d like to get lower interest rates to pay off your debt, investigate a debt management solution.


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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