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Read MoreFirst, contact your lender to ask about hardship programs or payment deferral options. If that fails, consider selling the car privately (if you can cover the loan balance) or trading it in for a far less expensive vehicle.
A low credit score makes it difficult or impossible to qualify for new loans, mortgages, or credit cards. If you are approved, you will receive much higher interest rates, costing you tens of thousands of dollars over time.
Conduct a rigorous audit of your budget. Identify every possible expense that can be reduced or eliminated temporarily to free up cash. This extra money should be directed toward paying off the debt with the smallest balance (Debt Snowball) or highest interest rate (Debt Avalanche).
Each formal application triggers a hard inquiry, which temporarily lowers your credit score. Multiple applications in a short time signal high risk to lenders and can further damage your score, reducing approval chances.
Forbearance is a temporary agreement with a lender to pause or reduce payments for a specific period. While interest may continue to accrue, it provides immediate relief to cash flow during a crisis.