You have made the decision that debt consolidation loans Texas could be the answer to your financial woes. One of the positive aspects of debt consolidation is the fact that it lowers the interest rates that you are currently paying on your debts. In order for debt consolidation to benefit you, you need to have the lowest interest rate possible on your new loan.
How Do You Get a Debt Consolidation Loan in Texas?
As with all other loans, lenders want to check your credit reports before they approve you for a loan. They also use these same reports to set the interest rate that you will pay on the loan. If you want the lowest rate, your credit history must be outstanding. That means that you have paid all of your bills on time and never defaulted on a loan. Lenders also require that you offer them proof of income. This demonstrates that you have the means to re-pay the money they lend you. They also like to see that you have equity, and the most common type is a house.
Since you are looking for debt consolidation loans Texas, it is safe to say that you may not have the above-mentioned qualifiers, but you still need the lowest rate on your debt consolidation loan. Increasing your credit scores will improve your chances of getting a low interest rate.
Here are the steps you’ll need to take to work on increasing your credit score so you can get a low interest rate on your debt consolidation loan:
Check Your Credit Reports
The first thing you can do to improve your credit scores is make sure that everything on your credit reports is correct. There are three major credit bureaus, and they are TransUnion, Equifax and Experian. You are entitled to receive one free report from each of these entities every year. When you receive your reports, you will need to check them for errors. If there are errors on your reports, these errors are causing your scores to be lower than they would ordinarily be, but you can dispute them.
You will need to write each credit bureau a letter stating that there are inaccuracies on your reports. You will have to present evidence that these bills have been paid, but make sure that you only send copies of this proof to the bureaus. Highlight the inaccurate items on each report, explain why it is inaccurate and ask the bureau to remove it from your report. When you mail these letters, send them by certified mail so that you can receive proof that they were delivered to the bureaus. Also, keep a copy of your letter and anything that you send to the credit bureaus.
Each credit bureau is independent from the others, so you will have to dispute an error with each company if the error exists on all three reports. After you dispute every error, the credit bureaus will be required to investigate with the company that reported the delinquency within 30 days. The company will perform its own investigation and will report back to the credit bureaus that the item has been corrected. Your credit scores should see an increase after these corrections have been made.
Make All of Your Payments on Time
You can also perform actions that will improve how your credit reports will look in the future. You may be making late payments because you are experiencing financial difficulties right now. Make a point of paying everything on time as much as you can because each late payment may be reported to the credit bureaus, and this will lower your scores. One great way to ensure that you never miss a payment is to set up automatic payments. This strategy will ensure that you cannot sabotage yourself as you are improving your credit score.
No More Credit Cards
Don’t apply for any new credit cards especially if you are in credit card debt! If you have credit card debt, you have demonstrated that you are having trouble managing your debts, so avoid this altogether. You may be able to obtain a secured credit card after you have obtained a consolidation loan, but right now is not the time.
Continue to Make Your Minimum Payments
You may have come to the conclusion that it is too difficult for you to make even the minimum payments on your debts, and that is why you need debt consolidation loans Texas. Even so, make every effort to pay these balances because your creditors will continue to report any missed or late payments to the credit bureaus, and this will derail your quest for a higher credit score.
Christian Debt Counselors is prepared to assist you in obtaining debt consolidation loans Texas if you have credit card debt, personal loans, collections accounts, overdue medical bills or other unsecured debts. Call us today to speak with one of our debt counselors. We look forward to helping you start your journey to financial freedom.