Should I keep applying for a heloc until I get one?

[Khadijah Celestine]

I have bad credit. I currently pay $1500 a month in total debt and have finally reached a stable enough place where I can put an extra $900 towards my debt. I have $18,000 in high interest debt that I would like to get rid of ASAP. The other debts are my car loan and student loan which together are $800 and I have no problems paying those off slowly. I also own a Baltimore row house free and clear. 

I had a hard money lender come and view the house. All fixed up, he'd loan $25,000 on it for 5 years @ 18% interest. ($635 a month). I applied for a heloc at a local bank. Because of my income and DTI, I was conditionally approved for $25,000. I was later denied because of my low credit score. My only joint applicant does not have the required 700 credit score needed from the bank. They require a 700 credit score since this is an investment property and not my primary residence.

My goals are to get the heloc, finish renovations on the baltimore house (about $6,000 but I'm budgeting $10,000), and then use the rest to reduce the high interest debt until I can pay it off.

$25,000 heloc

-$10,000 renovations

-$15,000 high interest debt

I'll have $3,000 in high interest debt left and a renovated rental I can rent out.

Assuming I break even on the rental and it covers the loan and the maintenance, this lowers my monthly debt payments to $800. I'll be able to pay the extra $3,000 in two months and will be BAD-DEBT-FREE!! I can then use the other $1600 to pay off the heloc, pay off my car loan save for a house, not sure what I want to do yet.

My questions

1. I'm wondering if it's ok to apply to bank after bank after bank until someone will give me the heloc. 

2. If I do get the loan, what should I do with the extra $$$, I'm thinking save for a two-family primary residence so I can rent the nicer side out but I'd be curious to hear other suggestions.

If I don't get the loan, it'll take me a year to get rid of the high interest, but that will be another year the baltimore house is sitting empty. 

[Paul Allen]

@Khadijah Celestine first - well done on the hard work you are doing to get your financial house in order. That's awesome!

Applying for credit can adversely impact your credit score. You can get some details on that here: https://www.thebalance.com/factors-affecting-credi...

You may want to see if there are some other steps you can take to bolster your credit score before applying again. 

Best of Luck!