Good way to reduce credit?

Our credit rating isn't wonderful, and we are working on paying off credit cards. We have about 7000 in credit debt. Is it better to just make extra payments or look to find sometime of financing to pay it off despite not having a good credit rating?

The best and easiest way to improve your credit is to make payments on time always and to keep your credit cards below the maximum. Paying off credit doesn't actually improve your credit score. They want to see how you handle having credit over a period of time.

Of course, that is assuming that all the credit is open accounts now.

Knowledge is the most powerful tool. Know your rights and the system and how to work it to your benefit.

To just apply for another loan will make your credit rating fall even further, the interest will be unbearable, and you will still have the tendency to want to use the cards again, thus putting you in even worse shape. Start with cards that are still open and pay a little extra on those, I say those that are open because it will reflect on your credit/debt ration in a positive way increasing your score. Once it is below 30% of the total credit start working on the next one, of course insure all minimums on the others, and your other bills are paid on time. The most important factor here is time and consistency.

I am in a similar situation and have done several things over the years to work on my credit rating with great success. Taking out a lon or other financing to pay of the debt is just opening a new line of credit, hitting your fico to get that money. you are better off making extra payments to pay down the debt. indeed, if you are confronted with a choice btwn putting money away in savings at say 5% or paying down the debt at say 6%, you are economically better off paying down the debt. Now, if your interest rate on investment is guranteed to be higher than the interest on the debt, pay the minimim on the debt and invest the money in the higher interest erning investment. Right now, assuming you have a low FICO and the 7k debt is credit card, you are probably at 14+% on that debt and at best, you are getting 4% on investments, so pay that debt down.

I found that paying off one credit card with 2k on it improved my FICO by 20 points in a month.

You could consolidate but if you don't have good credit than the interest won't be good, however, it still may be better to do that though. If you decide to pay your bills on your though, First, cut up the ones you absolutely don't need. You can always request a new card later if you choose to. This way you won't be tempted to use what little credit you may have left on the card. and I suggest you make the minimum on the lower interest cards and pay extra on the higher interest cards. Some people think that paying the little ones off first is better but it's not. You need to pay the ones that are charging you 20 or 30 bucks in interest every month.
I learned ALOT from reading the Suze Orman books. Our credit score went from 520 to 658 within a year. Our debt was 9500. now it's down to 1200.
Good Luck!