Hi all, Just found this place from a link from another credit forum. I've been reading through this forum for the past 10 hours believe it or not, well not straight. There is so much info here, my brain is on overload. Considering people are so friendly here and are ready to help, I thought I'd post something to see if I could get a response. Sorry if in my first post I'm shooting questions, but I'm not in the position right now to give advice or answer any questions. Anyhoo, I have messed up credit, around 545 last time I checked. I had some financial troubles in college. I basically turned a $900 credit card debt into a $2100 one. How? Well by being late a hundred times and being over limit for a couple of months. I know I know, stupid arse couldn't handle a budget. Well, I had little to no money after paying my essential bills, ie. gas, electricity, rent etc.. I didn't receive much in loans and I was paying my bills selling commissioned artwork. A starving artist/student, boohoo. Well, I went into collections a few times, went NSF on my checking account a hundred times, and was late on a dozen other bills. I also had a checking account at union bank forcibly closed because I was unknowingly NSF for 6+ months. Basically, I started that account when I was 14, had very little money in it and totally forgot about it. When I reached 18 it no longer became a student checking and they started charging me monthly fees. Fees overdrew my account a dozen times till it reached -$200 then they closed my accounts. Well I never received a statement because a change of address. I found out about it only because I tried to open up a savings at washington mutual and they declined my app. Now I'm back on my feet financially. I'm doing decently as a freelancer, but job security is always up in the air, but I have around $23000 saved up. I do full time graphic design as a independent contractor for company at home and I have freelance jobs on the side. Now I'm in a position to finally fix past mistakes and plan for the future. Well, I've paid off my CC debt then cancelled the card and all I have left is my $13000 student loan which is consolidated at 2.97%. I set up all the automatic electronic payment plans I could so I could avoid late payments. I've also set up a savings account to show creditors I'm actually saving. I also plan to get recent reports from all three agencies and dispute any errors. Now, I'm a little confused as to what else I should do considering my financial situation. Since payment of loans will probably have a great positive affect on my CR, should I take my savings and pay off that $13000? Or should I help my mom buy a house with me as a cosigner? I'm leaning towards the latter since my interest rate is so low on my loans and I want to be a good son and help my mom buy her first home (I can't believe she has been renting for 30+ years!). Also, being a cosigner would also help my credit score a little? Any advice concerning this? Am I going about self credit repair the right way? Thanks All!
Greetings, First let me say that I'm not a professional mortgage broker, financial adviser, etc. That said, I feel your pain. The college years really hosed me financially. The question is, just how far out of the FICO500's are you? Also, how old are you? Is your mother financially responsible? What is her credit like? The reason I ask is that if your scores aren't that great, even if you COULD co-sign a loan, I'm sure the interest rate would be rather high. Perhaps, if your mother's credit is good, she could get a better deal without you. Also keep in mind that as a co-signer, you are responsible if she cannot pay. I'm not sure if that's an added responsibility you want...along with your other school loan debt. Also, will YOU want to get a house for yourself anytime soon? Finally, I had about $10,000 in outstanding college loan debt about 2.5 years ago. I'm down to $1000, and I did this by paying aggressively while I could...before the wife and new kid dragged me down . If I had $23,000 and owed $13,000 in college loan debt, I would use the savings to pay at least half the loan off. Since your income may be erratic, it's probably not wise to use up all of your savings, especially with a 2.x% rate. But it's still a bit to have to worry about. The faster you can pay it off, the better. As I learned the hard way, you never know what changes life will throw at you. It's best to get your finances under control ASAP, and while you still have the means and ability. But that's just my opinion. Cheers, Keirmeister
Yeah, I have to do a lot of thinking about this. Right now paying off a chunk of that loan sounds like a good idea. I'll probably hold off a year or two in deciding whether to buy a house with my mom since I'm only 25 and I'd like to see if I could improve my financial status and credit . Besides I'm really torn. My mom is 63 and a couple of years from retirement so I'd like to set her up in a house, but that would mean giving up a lot of financial liberties and a house for myself is out of the question for at least 5-10 years. Well, I'm off to do some more creditnet research. Thanks for the help!
Hehe I just noticed the title. I originally wanted to ask for suggestions on what to do with 3 useless credit cards that I recently received. Knowing know what I know now, I think I should have went with a secured card. Anyhow, going on someone's advice that creditors want to see that you have credit, I decided to sign up for a few credit cards. I should have looked at the fine print more closely, but some of them are charging me a yearly fee. Well, I got denied for 2 and was approved for 3. One, a capital one platinum has an apr of 25% and a $200 limit. The other, a chase platinum, has an apr of 18.7%, a limit of $300 and $39.95 yearly fee. The last, a BOFA platinum has an apr of 16%, a $500 limit and a $69.96 annual fee. Now I'm getting better offers for the same cards and only a month later! They're offering me no annual fees, lower interest rates and higher limits. Should I cancel the cards I have now or wait for my credit score to improve before signing on to new better offers?
I presume you have already paid the fees, so for this year that is water under the bridge. I also presume you are not carrying balances on the cards, but paying them off in full each month, so your balance to credit limit usage is low. Credit grantors, and the FICO scores they use, like to see a history of credit used, the longer the better, and all "paid as agreed", with low balances compared to credit limit. At what point it will pay to apply for more competitive cards with no fees will depend on what your FICO scores are, and how much they are being affected by your recent credit report inquiries. After about 6 months, the effect of the inquiries should diminish, resulting in better offers. My view is you should shift to a small number of cards with no fees and low competitive rates from banks that have a reputation for dealing honestly (good customer service) and increasing credit lines (i.e. prime CCs), while leaving your current accounts open during the transition to both build an initial credit history, and have low usage ratios. If you didn't already have a couple CC accounts and were first establishing credit, I would have suggested starting with a gas card, department store card, or a card thru a credit union or bank where you had had a checking or savings account for some time. After you have established better accounts, you should close your fee-based accounts, or ask them to convert to no-fee, knowing that if they don't you are willing and ready to close. It sounds like they may be offering you better offers already, but I don't know if you would get one if you already just opened an account with them. You will start getting an idea of what terms are competetive based on offers, and can check via Internet sites dealing with customer problems, including this site, on how responsive they are. Most banks will have some problems, but some, especially catering to sub-prime customers, seem to mess up so much they must work at it. You don't need them no matter what they promise.
Don't close them. History (length of time an account has been open) is very important, especially when your credit is new. Use the cars carefully, charging only what you can pay, and pay them off each month. After six months, call and ask for a credit limit increase and a rate decrease. Next year when your annual fee comes due, call and ask if it's possible to transfer to a card with no fee.
Great advice guys! I'm so glad I found this forum. Now I can move forward a little less blindly. Thanks
