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Originally Posted by Bryan26
I have total debt of $13,000 (not including my car) which includes $6,000 in one credit card and $7,000 in an engagement ring. I'm paying around $350 each per month just to pay a little more than the minimum. I just got married and considering buying a house in the near future. I was offered lines of credit from two different companies, but I'm not sure if this would hinder our chance of a loan. My Fico score is around 685 and my wife's is around 710. After all the bills I'm pretty much living paycheck to paycheck. What should i do? Thanks.
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I know this can be hard to do, but I'd hold off on buying the house for a while until you are in a better financial position.
I assume that you are currently renting - if anything breaks, the landlord will fix (and pay!) for it. If you are currently just scraping by and you needed to get something expensive replaced/repaired in your home, you'd be in a world of hurt without a lot of options.
You have decent scores, but paying down your credit card balances would improve them further. Typically, if you are able to get your scores over 720 you'll qualify for the best pricing and most flexible programs.
I would recommend paying off your debts, and then saving up for a downpayment - a minimum of 5% of the purchase price + an extra couple of thousand for the costs involved. The more you can save up, the better position you'll be in, but there is a world of difference in interest rate for most 100% programs vs 95% programs.
You may want to take a look at the money you spend on a monthly basis, and see if there is anyway you can cut costs without sacrificing your lifestyle very much. Another option would be for you and/or your wife to get a part-time job for additional income. A combination of both would likely help get you where you want to be the fastest - but make sure that the money that you are saving/additional money you are earning is going towards your bills. After you have paid off your debt, use a bit of the money to reward yourself - you've earned it.
As far as the line of credit goes, I would check and re-check the terms that they are offering you. Make sure that it is actually advantageous for you to accept them, typcially transferring balances around will do nothing but damage your scores with the additional inquiries on your credit report. Often times the "personal line of credit" loans have outrageous interest rates and ridiculous pre-payment penalties.
When paying down your debt, make the minimum payment on all your debts with the exception of the account with the highest interest rate. Take every extra penny you can find and put it on that account. Once it is paid off, take all the payments you were paying on that account and roll it over to the next one with the highest interest rate. You'll likely be able to pay off the debts sooner than you think.
Hope this helps - good luck.
If you have any more questions, please feel free to ask!