Hi All, I ran into this site last night, and after reading the testimonials (especially regarding the "psycho" letters), I got hooked and KNEW this place was a God-send. I am thinking of proposing to my girlfriend next month. However, I do not want to marry her without beginning my journey of strengthening my credit score. She's got A+ credit, and I don't want to pull her down, as she's worked hard to keep her score at that level. I'm a 25 year-old accountant, and got into a couple of credit cards in college (both BOA) as a result of a combination of a) not getting enough financial aid during college and b) a single not being able to provide me with financial assistance during school. I got accepted into a very good academic school, and as I was the first in my family to have this opportunity, I felt pressure to accept. I did, and took on a significant amount of school loans ($45,558, which results in abouth $450 monthly). I currently have $4,922 in credit card debt (2 BOA cards), and I'm paying the minimum payments. I have a car loan (3-year lease), for which I'm paying $357/month. The killer is that I moved in with my girlfriend, and have been paying 2/3 of the mortgage, $1500/month. Around Christmas time, I overextended myself, and spent out of my means, and that caused me to be 30 days delinquent on several accounts: Car and my 2 Credit Cards. I also have an account that was charged as a bad debt write-off (about $300) from a Lord & Taylor CC which was used by mom, without my authorization. When I asked her, she said that she paid everything off, but a balance still showed. Well, being the stubborn guy that I am, I said "F*CK that, I'm not paying this if I didn't incur this charge." Well, I totally forgot about how it would affect my credit until it was too late. Now I've got one "bad guy" on my report from GE Money/Lord and Taylor and another from the collections agency. Sucks, I tell ya. Besides those recent blemishes, I have no "bad guys" on my report. I attempted to find the "FAQ" blog in order to prepare me to start drafting some psycho letters, but the links are dead. I really want to get my credit straightened out, and ensure that my engagement starts on a good foot. I'd appreciate help. Thank you, and God bless.
From one recovering creditaholic to another. Step one: live within your means. Step two: Just say NO! (to anything you don't REALLY need). Car Lease: red flag. If you can't afford the down payment or monthlies of a car loan, you have more car than you can afford. Missed payments: you're trying to buy your way into or out of something. (see step one above) Until you get these urges, desires, "needs," or whatever you want to call them under control. If you fix it today, you'll be right back to where you started from (or, more likely, worse) in a couple of years (or less). The problem with accountants (I've got a Business degree so I know what I'm talking about) is that they know all the ways to rationalize what is really just plain bad behavior. (Look at Wall st. if you are afraid to look in the mirror). Trust me when I say this. I know exactly where you are now and I know exactly what will happen if you don't get it under control, NOW. It's a long and bitter road. Fix it now while you still can.
ccbob, Thanks, I truly appreciate the quick response along with your "no beating around the bush" style. I'm starting to realize this, and I'm hoping its not too little too late. By any chance do you have a link to that FAQ guide that was posted a few years back?
It's never to late to stop the spending also you can keep her credit separate from you.Remember this is going to pass.You need to get on top of this.That way you can learn.Stay away from the pyscho letters their you last resort,they can do more harm then good.
The good news is that you're realizing it's time for a change. That means there's a good chance you can turn this around without too much grief (some short-term lifestyle changes, to be sure, but at least a minimum of grief). I was in a similar position @ 25 and waited until 45 before I finally got it together. It's not a question of whether you can turn it around, it's just a question of how much you want to lose in the process. If you fix it now, you're much more likely to keep what you earn rather than give it to someone else (e.g. girlfriends, ex-wives, heartless bankers, bankruptcy lawyers, etc.) In any case, good luck. RE, the FAQ, I think that's been pulled because much of the content is out dated, if not just plain wrong. One of the Mods can give you a more accurate answer. In a nutshell, I'd say you've already started on the process: admit things need to change. Insofar as your credit goes, I'll give you my short list: 1) figure out what you have to work with. (make a budget that has plenty of breathing room (don't budget to the last penny unless you can actually live like that). Be realistic. What do you really NEED and what can you give up for a while. (Remember, this is just to get yourself back on your feet). For this part, figure minimum payments for everything. This might require some short-term adjustments. (e.g. how did you get stuck paying 2/3 of your girlfriend's mortgage? Or did you buy it jointly? I don't mean to sound rude, but, your the first question you might need to ask is if you can afford to be with this person. Let me guess, you went into hock buying her gifts. I'm not Oprah or Dr. Phil but if you're going into debt for the engagement, that's a marriage headed for divorce before you even walk down the aisle). 2) Knowing what you have to work with, figure out how you can get current (if necessary) then how to pay things down/off. If you have nothing left over from (1) to pay things off, you have some hard choices to make: bigger lifestyle changes, selling assets, taking a 2nd job, declaring bankruptcy, to name a few. 3) once you get your side of the finances in order, figure out what needs work in your credit report (this comes in at 3 or later because you really shouldn't be thinking of pursuing any more credit at this point, which makes the content of your credit report somewhat irrelevant for the time being). Get a copy of your credit report from each bureau (e.g. goto annualcreditreport.com for your free one from each bureau). Go through it with a fine-toothed comb. What actions you need to take from here depend on what's on your credit reports. From what you describe, paying down your credit cards (lowering utilization) will make the biggest dent in them. I'd guess if you got the credit cards down to below 30% utilization, your scores would go to the high 600s. If you have some cards with one or two late payments but are currently up-to-date and in good standing, you might try to dispute them saying they were late due to extraordinary circumstances (a family change, change of address, or something like that). Sometimes that's all it takes to fix those situations. If you have any collection accounts that are not paid, you might be able to fight them but that's the subject for a separate topic. If they are paid, then don't worry about them. They'll be there for the rest of their 7-yr reporting period and, while not impossible, it's not likely you'll be able to remove them. The things to remember re: credit score: utilization and payment history. Get/Keep utilization low and get/keep payment history current. Good luck!
I just wanted to bump this thread: As I noted before, I want to begin bumping my score up. What should I first focus on? Paying off my credit card debt to decrease my utilization? or attemp to get my 30-day delinquencies taken off my credit report?
I'd get the utilization down first, I think. That's probably impacting you more right now. How old are your late pays? Have you settled the accounts, or do you still owe the debt?
1. Will do. 2. The late pays occurred this year. All in Feb 2009. Everything is settled (credit card minimum payments and lease payment).
If the lates are that new, they may be hurting you. If the accounts are still open, you might try a goodwill letter. If they're closed, check your report closely and see if there are any data fields you can dispute. But if the entire tradeline is removed, it may hurt you even more than the late pays are hurting. I think I'd still work on the utilization and maybe try a goodwill letter to the creditor if you can come up with a good reason that you were late.
