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Repairing credit.

Jerry said:
My divorce was messy and took it's toll, but it's over now. While I've never been a fan of using credit cards and whatnot, I do need to fair credit score to show future landlords and possibly employers. While I was working on power-lines in Oklahoma the reality of the need to have a fair score really hit me. It was impossible for me to get an apartment even for 6 months and a healthy deposit.

I'm performing my due diligence on my own with respect to researching how to build up credit without getting cornered into, for example, credit-card fine print which ruins me.

My basic idea is to take out a credit card and use it to pay rent, and send the payment to the credit card company the same week so that it's paid. Is this a good way to go about it? Can you recommend a card? Do you know of other strategies to fix credit? Also what about these 'free credit report' places, they keep asking for card info so they can charge me and that's exactly what I want to avoid.

Any help you can give would be apreciated.
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Jerry, my friend, my credit was in the toilet and it only took me four (4) months to get it all fixed well enough to buy my first home on credit. The other previous two I paid cash.
Here is what I did and I hope it helps.

1) Save $2,000 cash and keep it home. It is not as hard as it seems. When you see it build up, you will treasure it more. I found it easy to do by just saving $10 bills. You seldom see them, so just squirrel them away.

2) Get rid of ALL credit cards. They have their fingers poised over that red button to slam your credit if you are even 2 seconds late with a payment. Get rid of them.

3) ANNUALCREDITREPORT.com is the ONLY....ONLY free credit agency. All others are a lie. Get a new printer ink cartridge and print out all three reports.

4) Do not worry what your score is at this time. The reports generate your score. Fix the reports and your score will rise.

5) Go over your printed reports, then got to the websites for each agency and submit a DISPUTE. Just remember to handle each dispute one at a time. You are dealing with INDIA and they cannot handle any more than that. 100% of all of the credit agencies are based in INDIA. That is why it is best to deal with them on-line rather than trying to use verbage. They will tell you one thing and then not do it.

6) This little back and forth with all three agencies will take a few months, but it is well worth it. I found all kinds of glaring errors on mine that needed to be fixed, but each one had to be handled individually.

7) Be prepared to also talk directly to collection agencies and cancel your debt for a fraction of what is reported owed. They are happy to get SOMETHING, but ensure before you send them any money, you get the agreement in writing. Nothing done verbally exists once you hag up the phone.

8) In your email system, create a new folder to only put in all the many emails you will get as you are fixing things. it helps keep you organized.

9) Just checking what score you have is considered a negative hit. Don't do it....yet.

I hope this helps. It is what I did. Saving up that $2,000 keeps you focused, and helps eliminate some bad spending habits.
 
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Jerry, my wife told me to also add this because she used to work in a collection agency.

She said to NEVER tell a collection agency that you are attempting to repair your credit. Never tell them. They will bump up their settlement offer much higher if they know that info.

Say you can settle a $1,000 debt by paying $300. If they know you are trying to buy a home or repair your credit they will increase the amount to settle to $500 or $700.

Never let them know what you are attempting to do and what your end goal is.

Just say you want to settle the debt and that is all they need to know.
 
cpwill said:
I don't claim it's not more difficult - I pointed out that it was and offered steps to mitigate. I simply have trouble believing the claim that you can't rent without a good credit score. Where do the people with bad credit scores live? All of them in the street?



That's interesting. I'm tempted to go check. I always assumed that, as you didn't use debt, your score reduced over time.
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Thanks for the reply.

Once I got rolling with that reply, it just seemed to take-off; hope it didn't come across as a tirade.

To respond: Yeah, people with bad credit often end-up in more marginal living environments, but that's not to say destitute or on the streets. They may take less desirable choices in accommodations or neighborhood, or move-in with an established roommate, or simply stay with parents or relatives.

At best they either get lucky, or more likely work a lot harder to find a quality place that takes them. At worse, the suffer the aforementioned consequences.

And yeah, I do suspect your credit score/report is much better than you realize, and at the very least it is good enough for pretty much anything you want to do, perhaps even a mortgage. (mortgage = ultimate test of credit-worthiness, short of a business loan and personal bonding).

Like I said, the big-deal for most purposes is to not have negative credit issues.

And as an example: My daughter needed a car to do her nursing clinicals while working on her BSN. After considering all the options, we popped into a new car dealership for the heck of it, and she fell in love with a moderately priced new car.

She was a full-time student living in a dorm, had no credit-card save for ours, never built a credit record, never had a credit record of which we were aware, and never worked a day in her life until starting a part-time job just a month before (she had concentrated on school and scholarships at a community college, where she was successful in getting a half-ride, plus free dorm, to her university!).

And check this out: When the dealership ran her, she qualified for 1% financing with 1K down! And the 1K down was hypothetical; we just tossed that number out for purposes of running her credit! I believe they were prepared to give her 0 down. Her credit score was 740, if I remember correctly. It was based upon her having no negatives, and her deffered student loan that she had just recently taken, but would not be paying until she graduated two years hence. The loan was considered to be "paid as agreed" apparently, for credit reporting purposes.
 
When getting a credit card that you can easily pay through your bank's site, it's important to get a card that actually reports to all three credit reporting agencies. That may sound kind of wtf at first, but for years I was using a business card as literally my only credit card. It never occurred to me that it wasn't reporting to any of the agencies, so all those bills I paid in full like a good boy? All for nothing (well, except for not accruing massive debt, of course). As far as Experian was concerned, I wasn't even using a credit card. Getting my score above 790 was a straightforward affair after that, but man, I was so pissed.

Chomsky said:
And check this out: When the dealership ran her, she qualified for 1% financing with 1K down! And the 1K down was hypothetical; we just tossed that number out for purposes of running her credit! I believe they were prepared to give her 0 down. Her credit score was 740, if I remember correctly. It was based upon her having no negatives, and her deffered student loan that she had just recently taken, but would not be paying until she graduated two years hence. The loan was considered to be "paid as agreed" apparently, for credit reporting purposes.
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1%? What state is that in? And I was so smug about my 1.7% interest car loan.
 
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RetiredNSmilin said:
Jerry, my wife told me to also add this because she used to work in a collection agency.

She said to NEVER tell a collection agency that you are attempting to repair your credit. Never tell them. They will bump up their settlement offer much higher if they know that info.

Say you can settle a $1,000 debt by paying $300. If they know you are trying to buy a home or repair your credit they will increase the amount to settle to $500 or $700.

Never let them know what you are attempting to do and what your end goal is.

Just say you want to settle the debt and that is all they need to know.
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your wife is right. they will try to hold you hostage if they sense you urgently need to expunge this debt from your record
also, when negotiating an "offer in compromise" of the outstanding debt, make one of your conditions for the compromise that no 1099 (for 'unearned income'/the amount left unpaid) will be issued to the IRS. play that card at the end, after you and the creditor have agreed to the amount less than full value that they will accept to extinguish the debt obligation and report it as 'satisfied'
do this so that you are not obligated to pay taxes on the 'unearned income' realized via the non-payment of the full amount of the outstanding debt. this will cost the creditor nothing but it will save you from incurring an unexpected tax liability
 
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Cardinal said:
When getting a credit card that you can easily pay through your bank's site, it's important to get a card that actually reports to all three credit reporting agencies. That may sound kind of wtf at first, but for years I was using a business card as literally my only credit card. It never occurred to me that it wasn't reporting to any of the agencies, so all those bills I paid in full like a good boy? All for nothing (well, except for not accruing massive debt, of course). As far as Experian was concerned, I wasn't even using a credit card. Getting my score above 790 was a straightforward affair after that, but man, I was so pissed.


1%? What state is that in? And I was so smug about my 1.7% interest car loan.
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If you buy with cash, it's 0% ;).
 
cpwill said:
If you buy with cash, it's 0% ;).
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Absolutely, but if your interest is low enough it won't make any real footprint, and then you're liquid to the tune of up to 20k, which isn't for nothing for a lot of people.
 
RetiredNSmilin said:
Jerry, my wife told me to also add this because she used to work in a collection agency.

She said to NEVER tell a collection agency that you are attempting to repair your credit. Never tell them. They will bump up their settlement offer much higher if they know that info.

Say you can settle a $1,000 debt by paying $300. If they know you are trying to buy a home or repair your credit they will increase the amount to settle to $500 or $700.

Never let them know what you are attempting to do and what your end goal is.

Just say you want to settle the debt and that is all they need to know.
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I agree with her.

These guys are not your friends, they're businessmen that want your money!

If anything, I'd portray that I'm at the edge of filing bankruptcy, and ready to throw in the towel!

And of course, any settlement that comes about is only possible due to taking a personal loan from family.
 
jimbo said:
If you know someone in the loan business, they can pull your credit info. They are not supposed to reveal that data to you, but many will. That's how I do it. An in file costs them a couple of bucks. Most consider it a cost of doing business.

Funny that a lender can pull your data in less than a minute and it takes you half a day if you succeed at all, and the lender is not supposed to reveal info to which you are entitled by law.
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This is what I do with my mortgage broker, however in the mortgage business they not only share the report with you, but I believe they must share it if the client so desires; maybe that's something specific to my state or my broker?
 
Cardinal said:
When getting a credit card that you can easily pay through your bank's site, it's important to get a card that actually reports to all three credit reporting agencies. That may sound kind of wtf at first, but for years I was using a business card as literally my only credit card. It never occurred to me that it wasn't reporting to any of the agencies, so all those bills I paid in full like a good boy? All for nothing (well, except for not accruing massive debt, of course). As far as Experian was concerned, I wasn't even using a credit card. Getting my score above 790 was a straightforward affair after that, but man, I was so pissed.



1%? What state is that in? And I was so smug about my 1.7% interest car loan.
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It was in a heavily populated urban area of a Midwestern state.

And actually, it was 1.9%, through Toyota.

But to add insult to your injury, my wife recently was run by Toyota (herself only) with only a slightly better credit score than my kid's; the result: 0% down, 0% interest! :thumbs:

But in all fairness, this was during the new model release time so they were trying to clear off the lot I believe. Maybe the old saying "timing is everything" applies, or maybe Toyota financing is just a soft touch? It was on a Scion too (the new iM), which means fixed-price & no negotiating - so essentially we would get a car at fair cost and in our possession, but on lay-away plan! It was hard to refuse, but I didn't want to buy a car in it's first model year, even if a Toyota.

We'll see next year ...
 
cpwill said:
If you buy with cash, it's 0% ;).
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That's what my frugal European immigrant father called, "The Polish Payment Plan" - Everything down, & nothing a month! :mrgreen:
 
Cardinal said:
Absolutely, but if your interest is low enough it won't make any real footprint, and then you're liquid to the tune of up to 20k, which isn't for nothing for a lot of people.
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Exactly!

And then there's the missing "opportunity cost": You lose the profits that money could be earning for you.
 
Chomsky said:
Exactly!

And then there's the missing "opportunity cost": You lose the profits that money could be earning for you.
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Yup. The stock market at its crappiest would be making you at least 2.2% more than the loan would cost you.
 
Chomsky said:
It was in a heavily populated urban area of a Midwestern state.

And actually, it was 1.9%, through Toyota.

But to add insult to your injury, my wife recently was run by Toyota (herself only) with only a slightly better credit score than my kid's; the result: 0% down, 0% interest! :thumbs:

But in all fairness, this was during the new model release time so they were trying to clear off the lot I believe. Maybe the old saying "timing is everything" applies, or maybe Toyota financing is just a soft touch? It was on a Scion too (the new iM), which means fixed-price & no negotiating - so essentially we would get a car at fair cost and in our possession, but on lay-away plan! It was hard to refuse, but I didn't want to buy a car in it's first model year, even if a Toyota.

We'll see next year ...
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Ah yes, I've heard of such scenarios. If you have the right credit sometimes they'll do that just to encourage people to contribute to the economy.
 
RetiredNSmilin said:
7) Be prepared to also talk directly to collection agencies and cancel your debt for a fraction of what is reported owed. They are happy to get SOMETHING, but ensure before you send them any money, you get the agreement in writing. Nothing done verbally exists once you hag up the phone.
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It's all student loan debt :(
 
Jerry said:
My divorce was messy and took it's toll, but it's over now. While I've never been a fan of using credit cards and whatnot, I do need to fair credit score to show future landlords and possibly employers. While I was working on power-lines in Oklahoma the reality of the need to have a fair score really hit me. It was impossible for me to get an apartment even for 6 months and a healthy deposit.

I'm performing my due diligence on my own with respect to researching how to build up credit without getting cornered into, for example, credit-card fine print which ruins me.

My basic idea is to take out a credit card and use it to pay rent, and send the payment to the credit card company the same week so that it's paid. Is this a good way to go about it? Can you recommend a card? Do you know of other strategies to fix credit? Also what about these 'free credit report' places, they keep asking for card info so they can charge me and that's exactly what I want to avoid.

Any help you can give would be apreciated.
Click to expand...

Quick story, went from awesome credit, to **** credit and back to practically awesome credit.
The best tool to improve your credit is time.

You don't have to use your credit to improve it.
Example, you can merely have a credit card and not use it, as long as it stays open it will improve your score, the longer it is open.
Be aware though, that some companies will close the account if it's not in use.
Bad things generally fall off your report, after 7 years and sometimes you can game the reporting agencies to have it removed earlier (have done this).

Best type of credit to have reporting, on time, never late credit cards.
Second best, an on time mortgage.

If you still have outstanding negative items reporting, you can sometimes contact these companies and get what is called a pay for deletion (you pay, they remove the bad info).
Have it sent to you in writing, before you pay.

If you apply and get denied for a card, call them and try to negotiate your way into getting approved.(have done this)
Explain why your credit is crap, if it's a good reason (medical/divorce).

There is another forum I spent tons of time learning the tricks, if you'd like it, let me know.
 
Jerry said:
It's all student loan debt :(
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Well then, to have all of that forgiven, you can join the military or a contracting agency, go to some foreign land and get blown all to hell by a mortar like I did.

That is ONE WAY to have your student loans forgiven.

Of course that method has it's own collateral issues...bat sh*t goofyness, PTSD, equalibrium inbalance, connective tissue damage, lower back and spine constant pain, more F'ed up than a soup sandwich, but hey....no more student loan debt. :2razz:

I still retained my balls & sense of humor, though. Those two things are what matter most anyway.
 
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RetiredNSmilin said:
Well then, to have all of that forgiven, you can join the military, go to some foreign land and get blown all to hell by a mortar like I did.

That is ONE WAY to have your student loans forgiven.

Of course that method has it's own collateral issues...bat sh*t goofyness, PTSD, equalibrium inbalance, connective tissue damage, lower back and spine constant pain, more F'ed up than a soup sandwich, but hey....no more student loan debt. :2razz:

I still retained my balls & sense of humor, though.
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I wasn't aware that doing a stint in the service allowed you to write off your student loan debt. Do you have proof of that?
 
OrphanSlug said:
Without details (which would be terrible to put into this forum) it is difficult to give much account specific advice.

Basic strategies to improve one's credit score usually comes down to two key factors. One, good debt vs. bad debt. Two, the difference in credit available to credit used. With the first that just means handling structured debt well by handling the payments on time. Bad debt tends to be about carrying too much balance on too many forms of questionable credit. Don't make the mistake of trying to remove old debt from your credit history assuming you handled it well, as that establishes a history of "fulfilled accounts." With the second it comes down to how much balance you have standing on various unsecured credit cards. Carrying debt on two credit cards is worse than carrying more on one credit card, and the difference between used credit to amount available to you means a good bit to that score.

"Past dues" and delinquent accounts end up being the biggest harm on your credit score. If your divorce is truly final, and debt you carry as a result of that might be in position to negotiate a path to fulfilling that account. Sometimes, not all the time, you can offer the final decision on divorce as a means to handle that debt in new terms.

To build credit then boils down to obtaining that difference between credit used and credit available. Getting a card to pay rent is not a bad idea assuming that is allowed for by where you are doing so, but the onus is on you to ensure you never carry that balance to the point of drawing interest. Pay the balance as it arrives and you end up showing both timely payment and keeping that difference between credit used and credit available low.

You can obtain a free copy of your credit report once per year from the big three by law... Equifax, Experian, and TransUnion (identified as such in the Fair Credit Reporting Act.) Contact them directly and go through whatever process they ask and they cannot deny you this information in full historical format. They cannot by law tease you with a summary then ask for payment or credit card for the expanded history. They also by law cannot establish condition for you to obtain that report, like other credit services they usually provide. You ask, you give the right information, they have to give you the report.

Warning... third party agencies (Like "Free Credit Report" and "Credit Karma") also have to give you your entire credit report once per year from all three major national credit reporting agencies named above. However, they can ask for a credit card for the purpose of other services. Like "credit monitoring" and "identity protection." That is always up to you how to obtain your report, but to avoid headaches of these third party groups contact the big three directly.
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FWIW my son was working at a car dealership for a while and he's said a couple of times the Credit Karma scores were always a good 50 points higher than what he'd get back from Trans Union. It was painful dealing with marginal credit customers who thought they qualified for financing based on their Credit Karma score only to find out that that number was worthless.


I have one credit card. For years we did without and just used debit cards. I needed to rent a car and it turned out to be impossible to do without a credit card - the requirements to rent under a debit were painful. So I broke down and got one for the first time in probably 20 years. Use it. Pay it off at the end of the month every month. I only bring it up though because they make my credit score - at least I assume the one they use - available to me at all times.
 
WorldWatcher said:
It's a little more than a "stint" and you have to make 10-years work of payments. It's not like "sign up for a 4 year hitch and all is forgiven"...


https://studentaid.ed.gov/sa/sites/default/files/military-student-loan-benefits.pdf
>>>>
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Thanks. Wasn't being dismissive about it, I had not heard of the program (DOD Student Loan Repayment Program). I used the GI Bill myself instead of having to take loans. It's a good idea and mirrors what is done for teaching and nursing which have similar programs.
 
clownboy said:
Thanks. Wasn't being dismissive about it, I had not heard of the program (DOD Student Loan Repayment Program). I used the GI Bill myself instead of having to take loans. It's a good idea and mirrors what is done for teaching and nursing which have similar programs.
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Oh, I know, that's fine.


My daughters is graduating from law school this spring and will sit the bar in the summer. She will be going in the Air Force for a 4-year commitment because of undergraduate ROTC scholoarships, and she is working to get accepted in the JAG Corps. Typically law school graduates come out with about $150,000 in law school debt + another $50k - $60K of undergraduate debt. She's coming out with $65,000 total so she is at about 25% of her peers due to hard work and being tight with a buck.

She will make minimum payments for her 4-years and then decide. She will have to following options:

1. If she wants to stay in the JAG, then continue to make minimum payments and go for forgiveness after 10-years.

2. Leave the JAG and go into State or Federal Attorneys office. Since it is still public service the Air Force time and the State/Federal Attorney time both count toward 10-year forgiveness.

3. Leave the JAG and go into private sector, at which point she will make larger payments to payoff the debt as soon as possible.



>>>>
 
WorldWatcher said:
Oh, I know, that's fine.


My daughters is graduating from law school this spring and will sit the bar in the summer. She will be going in the Air Force for a 4-year commitment because of undergraduate ROTC scholoarships, and she is working to get accepted in the JAG Corps. Typically law school graduates come out with about $150,000 in law school debt + another $50k - $60K of undergraduate debt. She's coming out with $65,000 total so she is at about 25% of her peers due to hard work and being tight with a buck.

She will make minimum payments for her 4-years and then decide. She will have to following options:

1. If she wants to stay in the JAG, then continue to make minimum payments and go for forgiveness after 10-years.

2. Leave the JAG and go into State or Federal Attorneys office. Since it is still public service the Air Force time and the State/Federal Attorney time both count toward 10-year forgiveness.

3. Leave the JAG and go into private sector, at which point she will make larger payments to payoff the debt as soon as possible.



>>>>
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Smart cookie - the very best to her!
 
Jerry said:
My divorce was messy and took it's toll, but it's over now. While I've never been a fan of using credit cards and whatnot, I do need to fair credit score to show future landlords and possibly employers. While I was working on power-lines in Oklahoma the reality of the need to have a fair score really hit me. It was impossible for me to get an apartment even for 6 months and a healthy deposit.

I'm performing my due diligence on my own with respect to researching how to build up credit without getting cornered into, for example, credit-card fine print which ruins me.

My basic idea is to take out a credit card and use it to pay rent, and send the payment to the credit card company the same week so that it's paid. Is this a good way to go about it? Can you recommend a card? Do you know of other strategies to fix credit? Also what about these 'free credit report' places, they keep asking for card info so they can charge me and that's exactly what I want to avoid.

Any help you can give would be apreciated.
Click to expand...

Yeah, you want to get any credit card you can, gas is good, and you have to keep running balances for 6 months to a year. An apartment won't be a problem if you can meet first, last and deposit and show enough income to top pay.
 
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