Repairing credit.

Robert Ford · 2013-05-31T09:26:50-07:00

So here is the scoop. I am looking to repair my credit I have been working at this for about 2 years now. I have been able to obtain credit cards since my start. I went from having 10+ DAs and a Repo that I still owed on. I now have maybe 1 DA and the Repo is payed off, I have 9 credit cards all under 30% with exception of one that I got as a balance transfer card. I also recently had to purchase a vehicle as my old reliable became old and dead. My auto loan was for $14,000 and is now at $12,500. Once all my credit cards are paid off I will be paying more towards the auto. My monthly payment is $255 and I was going to pay either $300 or $350 towards that. All my payments are made on time! My revolving accounts get a payment every time I get paid! 4 of the 9 cards are at 0 balance, 1 at 90%, 1 at 50%, 1 at 30% and one at 10%. I can afford to pay $200 a pay to my credit cards. When one card gets paid off then the money used for that goes towards the card that is next closest to being paid off. I am going to start paying down the higher cards, like the one that is at 90%. I don't really use them any more. I have a Target store card that I use for daily use items, shampoo, shaving, and things like that. A Walmart card that is used for the same. A Best Buy card that is used only in store, and I don't shop there often. Amazon for the site only. I also have 3 Capital One (they bought my Orchard Bank account) and a Discover card. My average account limit is $600, 2 at $1000 (less then 30%) and one at $1500 (50%). My mom thought that it would be a great idea to help me out and add me to one of her cards that she just got. It has a $7500 limit and she charged it to $6000. Would it hurt me to have myself removed from that card? She is on fixed income and will take her a very long time to get the card under 50%? Also when I bought the car the first bank ran approved me, however 5 other banks were also pulled. I have about 20 hard inquiries on my credit which is way to high! In the next few months a few are coming off. I currently only use creditkarma.com to monitor because its truly free but I don't get a full report. I really would like to buy a house. I am sick of living with my mother. Its nice because I pay no rent, however sucks because she lives in a horrible section of the city! I have been debating on renting an apartment, however that will cut back on my available money to pay debt down quickly, and to save money quickly. I spent about 10 years of my life with no credit cards, no vehicle loan, and no debt whats so ever! Now I have a car payment, credit cards, and all kinds of things to pay! All I really want is to pay for a house! I need to find a way to get my scores up. Am I doing the right thing and now just having to deal with a waiting game? I know that the older DA accounts are still showing up on my credit, and the repo is still there as well (its well over 7 years old) it has been disputed multiple times and went from showing a balance of $0 to most recently $9,000 when there is nothing owed on it. The local credit repair lawyer refused to take my money and help because she said I am doing everything that I need to be doing and everything that she would do for me. So why should she take my money for something I am already doing, she has my respect!

Jeff S.

Investor · Oklahoma City, OK · Member since 2012 · 82 posts · 10 votes

13y

Would it hurt me to have myself removed from that card?

Depends on the bank - usually they want to see that the owner of the card has made the last 12 months payments, and they will usually remove that from their credit calc..again need to check with the lender.

Am I doing the right thing and now just having to deal with a waiting game?

You may want to check out Dave Ramsey's books: Total money makeover or Financial Peace: Dumping Debt. Utilize the debt snowball effect instead of just chunking out debt without a plan will help you get out of debt faster.

As far as wanting to buy a house - Make a plan, learn your market, save as much cash as you can and stay focused. I wouldn't advise spending money on renting a place if you don't have to. And the other question I would be asking is - Is owning my primary residence going to help me reach my goals? Because it can if you have a strategy, but if you don't have a strategy it's another expensive doodad according to rich dad!

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Katherine Harper

New York City, NY · Member since 2013 · 17 posts · 0 votes

13y

Robert you have a very correct decision of credit repairs at the correct time as you are going to buy a house and I have a solution for that because my friend Joey has recently completed credit repair course from famous organization and want to use his knowledge for the betterment of credit card customers in less price so think over it seriously if you really want help.

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Lynn McGeein

Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes

13y

Robert, It can be a very slow process, especially as it sounds like you have way too many credit cards, but you are on the right track. A lot of people really like Dave Ramsey, and your local library should have his books and others available if you haven't read them already. At the least, I'd stop charging anything on all the WalMart, Target, Amazon, etc., cards, destroy them so you don't use them anymore. Focus on staying on budget paying cash or using your debit card for all personal items -- food, toiletries, gas, etc. You have 4 cards paid off now, so you know how nice it is not having to send each one of them a minimum monthly payment. I'd make certain there is no annual fee charged on those 4, cancel them if there is. Also, if you are just an authorized user on your mother's card, take your name off. If you are a co-borrower, not much you can do until it's paid. If your home environment is contributing to your debt, then maybe consider a roommate situation somewhere if it would actually be cheaper than living where you are now, but if it's just a matter of needing your own space, keep being patient and paying off debt instead of moving.

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Account Closed

Private Financing Consultant · Honolulu, HI · Member since 2010 · 132 posts · 27 votes

12y

Robert,

You work hard and diligent about building a strong credit profile and I wish you luck. Having great credit will open up your access to many things - Not just a house. Your credit profile matters when you're looking to get the lowest interest rate on your mortgage, lowest monthly payments, insurance premium, utility contract, and even employment opportunities. Having access to credit also gives you the flexibility when you have emergency expenses.

I am not a credit repair specialist but have studied a lot about credit and referred many people to reliable sources to gain knowledge on credit.

Learn your rights so you can protect your credit. There are ways to prevent unwanted inquires and delete existing ones - especially if you didn't give the permission to pull your credit 20 times! They have to delete those inquiries or pay you for the damages!

Negociate credit card interest rates and payment terms down, increase spending limits on the cards will make your cards paid down fast and make those credit lines look a lot better on your report.

Long time derogatory items, leave them along if they really belong to you. Re-disputing them is like renewing the aged account and they will keep on showing up as newer problems.

Check my profile for a link to a home study course on credit. You might find the best way to deal with your credit situation.

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Jeff Bridges

Investor · Hyattsville, MD · Member since 2012 · 822 posts · 441 votes

12y

It feels good to reduce the number of cards with a balance such as tackling the one with 90%, but consider tackling/ overpaying your accounts with the highest interest rates first regardless of balance utilitzation %. This way you pay off the highest interest rate cards first and incur less of an uphill battle by paying the lease amount of interest possible. Do that in the order of highest to lowest rate cards until paid off. Then close off any that have an annual fee and leave the rest open, but put the cards in a storage box and never use them again. Use the 2 store cards (but only if you absolutely cannot afford to only use a debit card only) and the debit cards for remainder. After all, if you continue to use the store cards, best buy cards etc, you'll always be living outside your means and will never get down to a zero balance (after all, expenses have to be lower than your income, or else its impossible to get even let alone catch up). Take a hard look at your income after taxes, and create a budget that defines how much you can spend after your recurring expenses (auto loan). keep to that budget and don't allow yourself to go over no matter what). It might be time to go debit only until you can regain control of your budget and pay off all of your existing credit. wait a year, then apply for a higher balance CC and use responsibility with the same budget requirements...

score is based off total utilization from all credit lines, and less so the balance from one particular card. entries that are created the same day are usually counted as one hard inquiry for the purpose of your score, even though all inquiries will be shown. being a co-borrower only helps if that person always pays on time and has a low balance, but the new scoring system makes coborrowers get no positive credit as a result of being on someone elses account so best to be on your own.

Good luck!

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Repairing credit.

Repairing credit.

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