Hello, I am new to this Board and think it is awesome already. I have a Huge Dilema that is making me depressed and feeling like a total loser. So here it is I will try to make it short.
I am 31 years old and have been married for 10 years and have had financial problems ever since. We have a 5 year old and when I had him I stayed at home and did not work anymore. Well through those years my DH was only making about 28,000 a year and he was busting his tail at low paying jobs ect. Well he finally got a break and is making about 56,000 now and I am making about 17,000. That is a HUGE increase for us. Well we have about 15,000 in debt, medical bills, cell phones a judgement for rent credit cards ect. We have been really bad managing our money. Also the time I stayed home really set us back. Well our credit scores really stink. They are for me I 514, 515, 545...For DH they are 540, 525, 582. I dont know how to pull them up. I spoke with a good friend of the family who has a mortgage company and he told me to go through CCCS for 9 months then he will finance us FHA. So we have moved in with my MIL and she is building a 2 bedroom apartment in her basement for us and is charging us 400$ a month until we are ready to buy. Now she has told us we can stay here as long as we want too. It is really going to be a nice place. My problem is I really want to be a homeowner, I just feel like a loser. I know we are able to save alot here and I can probably do the whole distributing of the money to the crediters on my own but CCCS seems like that will get us in a house faster since I only need 9 months of paying them to get financed. I dont know how to pull our credit scores up. I also dont know if by me paying them on my own will make is go up????? Please help me and give me advice anyone. Thanks.....

Welcome;

The starting point is to determine why your scores are low.
Have you pulled copies of your reports?
Let's look at what's dragging your scores down and address that, one item at a time. (personal info, account numbers, etc aren't necessary)

In the meantime, are you current on all your obligations now? The first step in improving your credit is to stop it from getting any worse.

CCCS is sometimes useful if you are unable to pay revolving (credit card) accounts. Do some reading on them, not everyone's experience with them has been positive. They're not all negative either, the key is research to find a reputable one-

You might ask specifically about FHA over in the mortgage forum, I don't think that FHA really cares about CCCS in specific, I'd be interested in how your broker thinks they will help you qualify. But I'm not an FHA pro either, so ask someone in that forum who will know.

I did CCCS in the late 90's (Consumer Credit Counseling Services of Denver - reputable). Personally, I would not recommend going that route if you have any other way. Skimming your post - it looks like you have more than doubled your income. So basically the amount of debt you are looking at should be covered - just by that additional income alone. I understand not wanting to live with relatives. Can you rent a place of your own for a year for similar cost? Definately look at your reports and see what's on there. Do you have any current accounts that are in good standing?

I should add - that shortly after COMPLETING CCCS I was able to get FHA financing for a home. No one would touch me until that was completely off my reports. YMMV on that.

Thanks for the replies. Most stuff on my CR is not paid or past dues. I have one judgement. I can pay it all on my own with our income being higher now. We live in Maryland so renting somewhere else for what our Inlaws are charging is out. Rent around where we live is no less than 1300 a month. Should I call the crediters and make monthly payments or pay one bill in full at a time? Thanks...

The faster you drop the balances, the less you'll pay in interest charges. With credit cards, I'd pay as much off as possible as soon as possible.

I don't think you need to try CCCS yet.

Start with a budget. Figure out what you owe and what you have. List everything. Can anything be cut? The debt snowball spreadsheets are pinned up above. They're wonderful.

Do you have your credit reports? Are they accurate? Can anything be disputed?

Your scores will go up. In the meantime, get your finances in order. Get a down payment and an emergency fund together.

I think I will pay things on my own and see how that works for me. I am so worried about NEVER being able to buy with these low credit scores. Someone PLEASE tell me there is hope!!

Your scores aren't all that far off for mortgage purposes. Realistically, 700 scores aren't needed. You can get a decent mortgage in the 620 range.
You can get your scores up into that range in fairly short order, depending on what's holding them down.
Nothing is hopeless though, no matter what it is- there's a way to deal with it.

So I called all these places today on my CR and I told them starting next week I was going to pay them off one by one and they said right after I do that they will report it as paid. Well I only have about 2500$ in debt, alot less then I thought.

Now I am doing the same for DH. I think his is about 5,000. So that is my goal and I hope I see our score coming up. I signed up for the free 30 day trial of credit score and credit report through citi bank and I printed all of it out and now I am cancelling it before they charge me. I noticed that there are alot of inquiries in both of our reports, does that pull the score down too?

Sorry so many questions, as you can see I am learning, lol....

So total you are actually only looking at $7500? Definately not worth dealing with CCCS over that amount. Cut unnecessary things out of your budget - put every extra penny toward the highest interest rate. You should see a dramatic change in just a few months.

Good luck!

HOLD IT!

I want to clarify what you are saying here. The way I read your posts is that the first quote I put up there are your current bills, things that are showing up in your mailbox on a regular basis.

And I'm guessing that your second quote is the result of your looking at your credit reports to determine why your scores are so low, and they are old charged-off and collections accounts that you are no longer being billed for. Since you are relatively new here, I suspect that you might not know that simply paying those off won't improve your credit score, and might not be necessary, especially if they are out of SOL.

From my perspective, there are two major goals for you:

1) Get a handle on your current financial situation and managing a budget that will allow you to meet all of your family's needs with your current income.

2) Cleaning up your credit to improve your score.

You can get a lot of great advice and support from this board to accomplish both of those objectives, but you'll need to do a lot of reading and research on the board, and also be very specific in your postings. Terms like DOLA (date of last activity), SOL (statute of limitations), OC (original creditor), CA (collection agent/agency), and JDB (junk debt buyer) are ones that you need to become familiar with and understand the implications of how they apply to each and every one of your debts. Dealing with an OC is very different from dealing with a JDB, and a debt that is within SOL is an entirely different animal than one that is past SOL. Your car loan (secured) is also a different kind of debt than CC (unsecured credit card) debt, student loans, or medical debts.

Without more information about the nature and status of the $2500 worth of debt you discovered on your CR (and $5K for DH), I would advise you not to send them a single solitary nickel until it is determined that you really owe them. If they are old collections accounts, you can probably make them disappear from your credit report without spending any money on anything but postage.

Thanks alot. I did look over our credit reports and Mine is not as much as I thought. The combination of both of our debt is about 7,500. Now we also have a 800$ Judgement that is still on it. I dont see anything as a "charge off" yet, that is. Some things are only like 125$, for utility stuff. Cable stuff and cell phones ect. I do however have some medical debt too. So Should I start paying off one or two bills a pay? We get paid every two weeks and DH clears 1425 per pay. I did my own budget the other night and it is TIGHT, But I will have about 300 a month for the debt to pay. I gave us room for all of our other bills, food, car, school, and just other misc stuff. I really need to educate myself here on this website because I do not want to live at my Inlaws Forever, even though its a seperate apartment we want a home of our own. Real estate is really dropping here where we live too. Do you think I could pull things up within a year and our score would go up to buy? Thanks alot.

That's great! A very important first step in getting yourselves on track.

You are welcome to post that budget on the board, if you so choose. CBers can be mighty helpful when it comes to not only planning a workable budget, but also helping you to stay on it.

Knowing what you have over and above your necessarily living expenses ($300/mo.) will help to plan the approach in knocking out your other debts one by one.



Your goal of buying a home in a year is certainly understandable, and probably within the realm of possibility, but I would encourage you to focus first on establishing financial stability. There are many more expenses to home ownership beyond the monthly mortgage payments, taxes, and insurance. And you should also have some emergency savings built up before you take on the responsibility of home ownership. The fact that you *can* live with your in-laws is a financial advantage that many people do not have. If you approach it with the right attitude, it will help you to make the adjustment and live with it peacefully until your finances improve.



I find it odd that you have to look at your CR to find out what your debts are, but none of them are charge-offs. Are you not receiving any bills for these debts?

A few things to consider in planning the payment of the debts include these:

1) Anything that is relatively recent, still with the OC (not in collections yet), and are debts you are sure you owe should probably be paid asap. If you cannot pay them all off right away, contact the creditors and arrange to make regular partial payments until they are paid in full. The goal is to get them to disappear from your CR without a trace, no harm, no foul, no CAs.

2) If you have any CAs on your CR, send them DV letters. You might be able to get rid of them without making any payments.

3) If any of the accounts are past the SOL, you can also write letters and possibly get them deleted from your CR.

Those are only general comments, because you did not provide specific information about the debts. More specific information posted will yield more specific advice in dealing with them.

Has the judgement plaintiff taken any action to collect?

Thanks for the reply. Concerning the Judgement, The Landlord has taken us to court and won. So we have to pay him.

Also, I have not been recieving bills for all of the debts. I think most of the time when I do get one, I put it in a drawer because its so depressing. I know it sounds terribly careless and I have been, but I just thought "Out of sight, Out of Mind". Unfortunatly We have learned to hard way.

Does your credit report show a Charge off? If so how is it listed? Most stuff on our reports say, Account seriously past due. And they are reported every month. I have gotten a copy of the Report by A friend who is in Real Estate. He is the one who told us to go through CCCS.

I am sorry but I have no Idea what DV means...
Can I contact the credit bereau?
Thanks...

You should get your free copies of all three of your credit reports, and go through them with a fine-toothed comb. They can be obtained from: Free Credit Reports Once you have them, put them through the triage as described in PsychDoc's Credit Repair Seminars



DV is a letter requiring a creditor to validate a debt.
Yes, you can and you must contact the CRAs to repair your credit reports. Not by phone, but by writing letters to them.

There is a great deal of information (including explanations of these acronyms I'm throwing around) in the Newbie Forum. If you're serious about repairing your credit and achieving financial stability, you need to devote many hours to reading and reading and reading in there.



Ah... it's like that, is it. I know it isn't easy, but you cannot solve the problem until you face it squarely.

I hope your goal is not only to solve the temporary inconvenience of living with your in-laws, but to master your finances and credit. Doing that will require significant effort on your part, but it will also help you to not only get out of your current situation, but stay out of it permanently.

Yes, you CAN do it. CB can help.

Get busy reading in that Newbie Forum, and when you have specific questions, post them.

I am TOTALLY serious about getting things right! I want this to be a permanent thing for me and my DH. I am the one who gets all the bills and who pays them ect...He does none of that, and I like that because he is worse with the money then me!
We both want to feel a sense of security. With the way our credit is now, NOBODY would ever give us anything and if a real emergency ever came up what would we do? We are in our early 30's and have a 5 year old child and I want to be able to sleep at night knowing I am making things right for our family. I will do PLENTY of reading on this site. I am also going to contact the credit bereaus to make sure everything is right that is on there, I noticed a few things that dont seem right. Thanks alot for th advice.

Make sure you have a basic understanding of the recommended process before you start working with the CRAs, and a plan of attack. You don't want to waste any good opportunities for the 1-2 punch.

Also, be aware that both you and DH have individual credit reports you will probably want to work through. Whether you tackle both sets at once or work on one at a time is up to you.

OP, I just want to offer encouragement here ... three years ago I was leading an ostrich lifestyle too. I would just toss things because I was afraid to open envelopes. It DOES get better and you will find a huge burden lifted after you start facing your fears. I know I did!

Good luck! I know you can do this - you seem to have such a good head on your shoulders!

Thanks alot! I appreciate the encouragement. I hate to open these bills because of the dreaded Collections ect.....I am tackling them a few at a time each pay now and I know it will get better. I am looking forward to the future!!

WTG!!!!

I know it seems overwhelming now, but every long road is traveled one step at a time.

Best wishes.