Bad credit debt consolidation

There are a few options if you have a bad credit score and you need help with a debt consolidation loan:

bad credit debt consolidation

The trap of credit cards and finance

Getting a new credit card for the first time is exciting. Credit cards can feel like money for nothing. You may feel like you’ve had a windfall, and luxury purchases are now within reach. You can feel like you are Keeping up with the Kardashians: spa treatments, designer bags, amazing nights out with friends – living the dream!

Then another bank may offer you a credit card and that’s exciting again and you find more ways to spend, such as a holiday. After all, you deserve to treat yourself.

You might then upgrade your car. The car dealer talks you into a new car beyond your initial budget, with all the extras and also talks you into “easy finance”. You feel like a celebrity.

But eventually, the day comes when it all catches up with you and the weight of multiple debts with high interest can hit you like a tonne of bricks. Credit card debt and car finance payments can turn into bad credit very quickly. Luckily there is credit card Debt Consolidation which can get your credit card payments under control and prevent or less bad credit. If you already have bad credit, debt consolidation can help you get on top of debts and improve your credit score.

How people end up with bad credit

Everything is fine at first and many individuals manage by paying the minimum payment each month on credit cards and they can scrape the expensive car payments together. People get used to the finer things in life, and don’t want to give it up.

Unfortunately, if someone is spending beyond their means, to maintain a lifestyle that looks fantastic on social media, but on paper, is going backwards, it can be very easy to fall into late payments, defaults and even court judgements. All of which gives leads to a bad credit score.

This is the point at which most people tend to bury their head in the sand and try to keep up with mounting debt, contacts phone calls, demanding letters and emails from creditors, all wanting money that the person just doesn’t have. For some people, this is overwhelming and very stressful and appears to be unsolvable, but with a bad credit debt consolidation loan and so serious budgeting, you can find the light at the end of the tunnel.

How people end up with bad credit
Options for bad credit and mounting debt?

Bad credit Debt Consolidation loans

Once you get a bad credit score, it can be very hard to obtain additional finance. Many financial institutions view people as a bad credit risk and so credit limit increases, additional credit cards and more finance is an impossible task. The credit party comes to a stop and the reality of bad credit kicks in. Your payments may become prohibitive, interest astronomical and the stress is intense. For many people, it may feel like there is no way out.

Fortunately, there are bad credit Debt Consolidation options and there are financial solutions for those of you with bad credit. Remember, bad credit listings only stay on your file for 5 years, after which time you can rebuild your credit score in a more sustainable way, only borrowing what you can afford to pay back each month. The other option if you don’t want to wait five years, is to repair your credit history with a specialist. This does cost money, and many people just don’t have that money to spare.

That is where a bad credit Debt Consolidation loan can offer you a way out. It’s not a magic fix, but can make paying off your debt simpler.

Bad credit debt consolidation solutions

The solution that we offer here is debt consolidation loans for people with bad credit. The debt still needs to be paid, but we roll these into one monthly payment, so lingering debts are cleared, which can, in turn, improve a customers credit history down the track. Our customers then have a single monthly payment, manageable on their current income and financial obligations. This often results in lower interest rates that the credit cards and avoids those late fees as well as further defaults and/or negative credit listings.

Bad credit debt consolidation is a fantastic solution designed to break the downward spiral, putting you back in control of your finances. With this support, you can plan for a brighter future without the stress.

Bad credit debt consolidation loan

Frequently asked questions about bad credit debt consolidation

In Australia bad credit is calculated on a score. This is on a scale of 300 to 850, anything below 550 is considered a negative or bad credit score. Anything above 700+ is considered a good score and anything around 800 is regarded excellent. 

Your credit report contains information about your financial history. Credit bureaus (such as Experian and Equifax) use this information to calculate your risk as a borrower, which is reflected as a credit score. Missed repayments, loan defaults, debt agreements and bankruptcy are all listed in your credit file and can result in a low credit score.

If you have a poor credit score it can get in the way of the credit you want and could mean you’re turned down by a lender.

You can work on your score to improve the chance of a deal you’re happy with. The key is to understand where your credit score is at and how to improve it.

Bad credit can happen to anyone. Life events such as financial hardship, divorce, loss of a loved one, illness can lead to missed payments, defaults and court judgments. This is further complicated by the fact that each time your enquire about credit with many lenders, the enquiry is recorded and several enquiries are considered negative and will end up giving you a bad credit score.

Fortunately there are solutions to bad credit. Black marks and judgments for example can only be on your credit file for 5 years, after which your slate is clean. There are also strict rules as to how bad credit can be recorded on your file so in many cases, these can be removed. This process is called credit repair.

There are also loans specifically tailored to people with poor credit. These are called bad credit loans. 

In the case of debt consolidation, loans to people with a poor credit score are called bad credit debt consolidation loans.

As they say, prevention is better than a cure, so it’s a good idea to practise good credit behaviours if you can. These include:

  • Monitor your credit score: Obtain a copy of your credit report and credit score. You can also sign up to receive notifications if something changes in your credit report. This means you can stay on top of your credit report. When you receive your score, you will receive information about what is most contributing to your bad credit rating. Check this report regularly for areas in which you can improve.
  • Pay your bills on time. When you stay on top of paying your bills and loan repayments, this can contribute to an improved credit score. It shows banks your improved financial discipline. Under Australia’s comprehensive reporting system, your credit file contains positive and negative information about your history. So build on the positives and eliminate the negatives!
  • Pay your debts: Initially your should check how much you owe and how many sources of debt you have. Try to focus on one at a time and work on a budget, using a budget tracker, and cut back your spending in areas that aren’t essential to bring your debts under control. Payments of $150 or more that are over 60 days late will stay on your credit report for 5 years, even after you have paid them. If you find yourself struggling to repay your accounts, the best course of action is to contact the creditor to discuss an alternative repayment plan. This will help avoid defaulting on payments.
  • Lower your credit card limit: If you have a high limit that you’re not using, contact your bank to lower it. There’s no point tempting yourself!
  • Avoid making multiple credit applications: Making multiple credit applications in a short period of time, will lower your credit score and indicate to lenders you are under financial stress. 

If you think there is a mistake on your credit file you can contact the creditor and ask for the black mark to be removed, or alternatively contact a reputable credit repair company such as Clean Credit to assist you with the process. 

Yes, we have a range of loan products we can offer, including consolidation loans for people with bad credit. It can be overwhelming when you have multiple debts that feel like you are spiralling out of control. A debt consolidation loan can help you with one repayment amount, one repayment date weekly, fortnightly or monthly and one interest rate (usually lower than credit card interest rates). Paying off these loans with a debt consolidation loan can help improve your credit situation and get you back on track to becoming debt free.

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