Ok all........I am happy to say once I get one last statement from a creditor, everything but my student loans will be paid off. Other than getting ahold of my credit reports and making sure everything is reflected correctly, is there anything else I should do to rebuild my credit? Any suggestions on a card I can apply for that will help in this?
Cathy, That is outstanding news! I know exactly how you felt when I achieved the same thing about 2 years ago. But those student loans! Necessary evil and will pay off longterm! As for what's next, here's a few things I've done since 2009. By the way, if you want to check out my personal blog about what I went through in detail, it's at armchaircreditrepair.blogspot .com. Feel free to message me or comment to get ahold of me there for any help I can give. 1. School loans - Not sure if you have a bunch of scattered loans or their condition, but here's something good I found that might save you some hassle longterm. It's Federal Direct Loans where you can go to them (the government, basically) and get all of your loans consolidated and get a lower fixed interest rate. Plus, if you have defaulted loans, they'll consolidate those too (saved my a## with that one!). Oh, and you can get on something called Income Based Repayment plan which will float your payment amounts based on your yearly income...so if you have a bad year or something happens, your payments can adjust! 2. Now that everything is paid off, if you have any credit lines that have good history, keep them open! Let that good history sit. But only use them once in a blue moon to keep them active and pay them off on time. And if you have to use any of them again for anything major, keep it under 25-30% of what you have available. 3. New cards/tradelines - For me, I found that going to a credit union was more flexible than a commercial bank, but that's just me. If the credit score remains a little rough, you might have to do secured cards - easy to get. But if you're doing ok on the score now, you might be able to get an unsecured fairly easily, especially at a CU where they are more flexible. Just get the right mix. I now have: a commercial bank visa, a credit union visa, a credit union personal line of credit, a retail store credit line, an online store credit line and some school loans. I go into what I was able to get in great detail on my blog if you want to find out more. Just don't get them all at once! Go slow, because everytime you apply for something, it puts a little hit on your score. Remember, debt free is a good thing! And, you've worked hard to get to this point. Remember the hard work it took and make sure you stay debt-free by putting your credit to work for you now, rather than working against you as in the past. You'll do fine!
Well.......I did work hard but I didn't earn the pay offs the way you think I did. Two years ago I was in a bad auto accident due to someone else's stupidity. Physically I am pretty much recovered but at the time I was semi-seriously injured. After nearly two years of legal limbo, my lawyer came through and that is what I decided to do with it-pay everything off. There wasn't enough left over for student loans (which are federal, by the way) but I am current on those. I do have a few things that are in good standing though-student loans, a visa with a very low limit (used for a small monthly recurring charge), a store card, a gas card, and an overdraft line attached to my checking account. I am thinking after reading your reply I will hold off on applying for anything new for awhile and let these build up my score for me. Only thing I really want right now is a gas card for a station closer to where I live which I have applied for but I have a feeling I won't get it this early in the repair game. That's ok though, because I consider this my chance to start over and definately won't make the same mistakes twice!
I think that's a smart idea to hold off for awhile and use what credit you do have wisely- paying all your bills on time and in full every month. Allocate as much as possible of your income to paying down those student loans on a monthly basis as well. Over time, your FICO scores will improve and you'll be in a better position to get approved for a good rewards credit card with a higher limit.
I am also taking a personal finance course. I actually signed up for it a long time ago before I knew this would happen but I want to learn how to do things right this time. I will be keeping all of my receipts and entering them into Quicken, so I can keep track of what I am spending and of my account balance and make adjustments accordingly. Hopefully this will be a good way to start out until I can finish my class!
hmm in regards to consolidating the student loans. Can I do that while I'm still in school or do I have to wait until I'm finished? I'm making payments on them (even though I can defer - I just want to at least put a dent in the balance by the time I'm done) How do I consolidate them? Just call? They are federal too...
As far as the student loans go, if the interest rate is decent, I wouldn't be in a big hurry to pay them off until you have some savings built up. I've seen so many people pay off everything, even lower-rate debt but not save anything. Then something happens and they have to use the credit cards, get balances up, start paying tremendous amounts of interest, etc. Get an emergency fund of at least six month's worth of expenses in a safe, liquid account like a money market account or CDs (ladder them with some coming due every few months so you can liquidate when you need to). You won't make a lot of interest on this money, but that's the whole idea. No risk, no reward. So you don't make a lot on it, but it's there if you need it. Then start working on the student loans after you have the safety net.
