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my husband and i have a combined debt of 65k with student loans and credit card debt combined. we both have credit scores in the 690’s so obviously we do not want to do anything to get it any lower. would debt consolidation hurt us in the long run. if so what are some better options?
most of our cards are at low interest rates, but the minimums are HIGH.

5 Thoughts on debt consolidation with good credit?
  1. Reply
    November 19, 2011 at 9:43 pm

    Cosolidation will help you, especially if you leave the credit lines open on cards and things.
    The less you pay out each month and the more untapped credit you have the better your score provided you pay on time. Consolidating leaving open credit lines and overpaying the minimum on the consolidation would kick your score up fast.

  2. Reply
    amanda a
    November 19, 2011 at 10:33 pm

    Your credit score shouldn’t change if you are replacing one lot of credit with another. It’s only if you increase your credit or are late paying your score will go down.

  3. Reply
    November 19, 2011 at 11:29 pm

    Although, my wife and I were not quite that far in debt, we had a similar problem. Before you do anything, you can do the debt consolidation yourself.

    If the student loans are low interest, mine were 2.5%, then you do not need to do anything with them. We did a cash out refi on our home and paid off as much high interest debt as we could. Basically it’s taking assets earning a low percentage such as 9%-10% on the equity of a home or 12%-15% on stocks or 401k plans and using it to pay off high interest debt.

    Take a look at where you have assets and how you can redistribute your wealth to pay off debt. After all, the objective of the game is to have your net worth climbing. If your assets aren’t earning you a greater percentage rate than you are paying on your debts then you need to restructure your assets.

    No matter how good your credit rating is, it doesn’t matter according to the bankruptcy laws. What the bankruptcy courts will look at is: “Is your Net Worth Positive or Negative”. If your Net Worth is too negative, you will be in bankruptcy land.

    But, before you take a big step like bankruptcy, do your Net Worth calculation and build a plan to redistribute your assets to pay off the high interest debt. If you are putting any more money into your 401k above your company match, stop this and begin using this to pay off debt. Lower your land line phone plan to a metered line. Reduce your cell phone plan. Verify that you are not paying too much for insurance than you need. Pay off your cars. Start with the high interest date and work your way down.

    Feel free to email me if you have any further questions. My email is in my profile.

    Good Luck!!

  4. Reply
    November 19, 2011 at 11:30 pm

    Debt consolidation could work out well for you, especially if you can make at least double you minimum payments on time! This will make your score go up. Your score is on the edge of fair going into good, so the chances of getting a decent interest rate are in your favour!

    I went through something similar as well as a bankruptcy and got my score up from 486 to 729 in a little over a year! If you have an interest rate lower than 4% on your student loans, then I would leave those alone and consolidate everything else.

    Read all of my website! I had to go through credit repair myself and I think you could benefit from my information, especially the “how credit scoring works” section.
    Good luck! I think you’re doing better than most and when you get your loans paid off, your score will be higher than most!

  5. Reply
    November 20, 2011 at 12:08 am

    If you have good credit, you do not need debt consolidation services. They will only hurt you… And cost money.

    Since you have good credit, I’ll assume that you have little to mild trouble paying those bills. In essence, you may be paycheck to paycheck, but you’re not drowning…

    Tip #1: Do not refinance those school loans until you lose the interets tax deduction (I believe you need to combined adjusted gross income of $ 75,000 or more for this to occur.)
    Tip #2: If you have good credit and the outgoing monthly payments are a problem, then yes merge these amounts into a single debt. It will reduce the total of the minimum payments you are making now and probably allow you to pay more than the minimum, thus getting you out of debt faster.
    Tip #3: If you own a home, refinance… Merge these debts into the home if you have enough equity. In essence, your interest will become tax deductable (tecnically no so, but there’s no way for the IRS to prove otherwise. Therefore, everyone claims this additional interest as a deduction.)

    In essence, with the high credit score, you’ve been doing something right. Since you are below 700 there may still be one or two items on your credit report that are hurting you. Check that out and repair if necessary. Remember, the higher the score, the easier access to borrowed money you will have.

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