Consolidating Your Credit Card Debt With Bad Credit

Having bad credit isn’t the end of the world, and it certainly shouldn’t stop you from seeking out financial help. For those who want to consolidate their credit card debt with bad credit, there are still plenty of options.

Read on to learn more about you can get back on track with debt consolidation even when you have a bad credit history.

Bad credit – how did I get here?

Bad credit history can come from a number of things but is generally due to a series of payment defaults, a repossession, discharged bankruptcies or part IX debt agreements, no credit history at all or too many loan enquires.

You can check your credit history regularly to ensure all of the items have been reported correctly, as you’re entitled to one free credit report every twelve months.

Consolidation – what exactly is it?

Consolidation will, quite simply, combine all of your debts into the one loan. So, whether you decide on a personal loan or mortgage refinancing, both of these consolidation methods will bring all of your credit card debts into the one loan, allowing you to make just one repayment instead of several.

In the process of consolidation, you’ll either make one consistent payment to your lender after they’ve paid your creditors on your behalf or you’ll use your consolidation loan to pay out your existing debts.

Why should I consolidate my credit card debt?

Often times consolidating your credit card debt can actually help to improve your credit rating ­­– which is key if you have bad credit right now. By making payments consistently and on time, it shows you are responsible and are able to meet your loan agreement.

A consolidation loan will also bring all of your credit card payments together, so you only have to make one monthly repayment instead of several.

Can I still consolidate my credit card debt with bad credit?

The short answer is yes – there are lenders who are willing to work with you even if your credit history is less than stellar. For those with bad credit looking to consolidate their credit card debt there are a few options to consider:

Personal loans

A personal loan will allow you to consolidate all of your debts, often at a lower interest rate than your existing credit cards. The payment terms are flexible and the consolidation may help to improve your credit rating.

Mortgage refinancing

Mortgage refinancing may be a good option if you own a home as it allows you to pay off your debts along with your mortgage over its full term. This provides you with a lower interest rate than say a personal loan or credit card, saving you more money in the long term.

If these options don’t suit you, you can also try the following:

Debt agreements

Debt agreements allow you to make regular repayments based on what you can afford – not what is owed. It uses part IX of the Bankruptcy Act, and will freeze the outstanding balance of your debts and stop any further interest, fees or charges.

Informal payment arrangements

An informal payment arrangement is very similar to a debt agreement but isn’t considered an act of bankruptcy. It will freeze the interest on your debts and stop creditors from calling, and lets you pay back your debts with an affordable plan.

Don’t let bad credit get in the way of getting good help

Remember, having bad credit history won’t necessarily stop you from consolidating your credit card debt, so it’s important to focus on what you can do now, rather than dwelling on how you got here.

Options such as personal loans, mortgage refinancing, debt agreements and informal payment arrangements will allow you to consolidate your credit card debt and get your finances back in order. With the right debt solution, you’ll be back to feeling financially free sooner than you think.

If you’ve got bad credit and you want to consolidate your credit card debt, we’ll be here to guide you. We’ve helped thousands of Australians get back on track and we can help you to. Call 1300 368 322 to talk to one of our friendly experts now.

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Debt Busters is an Australian owned business which was founded in 2005 - since then we have been able to help thousands regain financial control.

Debt Busters prides itself on providing a dedicated Client Service Manager to work closer with you and provide a higher level of customised service about your situation.