Consolidate Balances

• There are a few ways that you can consolidate existing credit card debt, even if you have bad credit. The most common way to consolidate credit card balances when you have bad credit is with a debt consolidation loan. You can secure these loans through a debt consolidation company, and it will show up on your credit report that you are under a consolidation plan. While it sounds negative, it can actually be a positive thing in the long run. Being under a consolidation plan will stop the late payments and delinquent balances from further damaging your credit. Your credit score may drop slightly when you get on the plan, but it should plateau once the plan has started. When you are done with consolidation and try to re-establish your credit, having that consolidation plan on your report shows that you took responsibility for your debt. If you stayed with the plan and paid it as instructed, it can only help you re-establish credit down the line.
  
  Investigate secured personal loans as an option for consolidation as well. Secured personal loans are loans that are backed by personal property known as collateral. The personal property needs to have an assignable value, and you must be able to prove that it is paid for. Work with your financial institution to see if you can get a secured personal loan to consolidate your debt. A secured personal loan will have a very positive effect on your credit.
  
  

Negotiate A Payoff

• If you are unable to be approved for any kind of consolidation program, your last resort is to negotiate a payoff amount with your creditors. This has nothing to do with your credit rating because by this point your credit rating has taken some serious hits. This is all about how much the credit card companies are willing to accept as payment on your accounts. Call your credit card companies and negotiate a final payoff amount that they agree will satisfy your account in full. You may be able to negotiate a payoff that eliminates your interest due, or the credit card company may choose to ask for interest to be paid back and they will forgive the principle due. Also negotiate monthly payments that you know you can make. If you set up deals you cannot satisfy, the credit card companies will have no choice but to escalate your account to a legal collection process.
  
  

Develop a Payoff Strategy

• If you feel you can pay your debt off on your own, then it would help to approach your debt in an organized manner. Write down your accounts on a piece of paper including the name of the creditor, the total amount due, the monthly payment amount, the interest rate, and the due date for each payment. Arrange them in order of due date, and then highlight the one with the highest interest rate. Make sure you pay your minimum payments each month prior to or on the due dates, and then pay extra to the card with the highest interest rate. Pay as much extra as you can, and continue this until the card is paid off. Then begin the same process with the next highest interest rate and continue this until all of your cards are paid off.