Should I Get A Debt Reduction Service To Help Me Out?

Q: 'm in grad school and I have 5 years before I settle down and buy a house. Let's just say I've made some bad financial decisions in the past so I need to get my 617 FICO score up as high as possible in this 5 year period. My credit report shows one 30 day late period. It's been paid off, but that card was canceled by the company (so that won't vanish for 7 years), so not much I can do about that. I have three credit cards more or less maxed out to ~4000. Two of the interest rates recently skyrocketed to ~30%!. I'm in the process of calling the companies to find out why, unless someone here knows why. I'm using my student loans (~6% interest v.s. 12 - 30%) to pay off these high interest rate credit cards. The problem is that I receive about $3000 quaterly, so this puts me a year away from converting my credit card debt to student loan debt. Am I going about this in the right way? Should I get a debt consolidation loan in the meantime? Should I get a debt reduction service to help me out? Any general advice?

A: Your plan makes sense. First and foremost you can't afford any more late payments. next you want to get the credit card balances under 50% of the credit limit. You should achieve this based on your plan well in advance of graduation. At that point you may have some negotiating room with your remaining cards but right now they got you and they know it. Both debt consolidation and debt redetection services will result in even lower credit scores so avoid them if you can. Follow your plan and you will be in good shape by graduation

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