Jump to content

Don't help someone build credit who isn't ready. Lesson Learned.


minglejill
 Share

The last post in this topic was posted 3950 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Recommended Posts

Maybe someone reading this will think twice about helping a family/friend build credit...

 

I've been repairing & building my credit for a few months. Still such a newbie though I've been reading & reading & reading this site (and I'll admit maybe one other...) and asking questions as I go along. Learning slowly.

 

My younger sister and I are very close and she might be the only one who knows how Chocolate Goodness my credit is/was. (Well, except for all of you... but you don't know me, so it's fine!) After confessing to her about all my new cards, and higher credit score she asked me to help her and her husband.

 

We pulled reports and at age 24 she has basically NO credit. She has one small loan that is paid off with 2 lates and a collection from a cell phone bill. Nothing else. She told me she hates credit cards, hates banks, hates contracts and is happy with cash only. BUT... wants to build credit since she's recently married and they are talking about a house in a few years. Her DH has two auto loans (one paid) and a card that is at 101% util with a $600 limit. No baddies, but obviously high utilization issues. His AAOA is about 1.5 years.

 

One thing I learned was how important it is to build early to allow age to grow. I'm an advocate of a thick file nowadays. So, I offered to help her with some shopping cart tricks and explained to him about utilzation. I shared this website with them. Showed how to read a credit report. Talked about addressing the late payments and layed out a plan to tackle the collection. I talked and talked and talked to her about the IMPORTANCE of NOT using the card except for a little cheap item and then PAY IT OFF! I stressed how I messed up by being young and dumb and charging things I didn't need and couldn't afford and how 6 years later it's still hurting me and how much work it's taking to try to fix it. I told them how embarrasing it was to have my first car repo'd. How depressed I was after that happened and how horrible of a person it made me feel. Etc, etc, etc. Things I wish my mom and dad would have taught us.

 

So, she got a fingerhut card and he got a Victorias Secret. They weren't approved or offered anything else we tried and I didn't want to risk lots of inqs for builder cards. I don't want them starting out with high fee cards like I did (Orchard bank) just to close them a few years later. They don't have the money for a secured card right now, but they both are planning on obtaining one by summer.

 

We laid out a 3 year plan. Worked the plan on paper together. They understood the concept & reasons why.

This was about 3 months ago.

 

Today I get a call from my sister. She's maxed out her (well, his) Vsecret card and fingerhut and missed both payments this month. Wonders if I can help them get a payday loan to pay it off.

 

UGHHHHHHHHHHHHHHH. I made her life worse. I feel guilty. I knew how she was with money and was hoping her recent marriage would have helped. I don't know him as well, but seems to be thriftier. I was wrong. She wasn't ready for plastic and needs to learn her lesson like I did. It sucks. I wanted to save her the headache. I guess the only saving grace is she's still young and when she's ready she'll have someone who can tell here where to go to LEARN IT ON HER OWN!

 

BTW sis... if you are on this site trying to read up on your own, congrats! Keep reading. It's confusing at first. Advice I wish I would have taken... don't even look at posts that have B* in the title until you have extra money to throw around and a clean report. Don't go on a wild app spree, it's easier to stick with just a few (like 3) cards and let them grow. And stop charging things you don't need!

Edited by minglejill
Link to comment
Share on other sites


They should probably both go for financial counseling. Little things like this are going to add up to massive debt if their is no control.

 

It's definitely a good thing to have credit, but in this case I think they should try to use cash only for now until they are ready

Link to comment
Share on other sites

They should probably both go for financial counseling. Little things like this are going to add up to massive debt if their is no control.

 

It's definitely a good thing to have credit, but in this case I think they should try to use cash only for now until they are ready

Before they got married their church had them take a couples financial planning type class for 2 weekends. Sent them home with a huge financial planning book/books on tape type thing. I don't think they ever opened it.

Link to comment
Share on other sites

Do not help her get a payday loan to pay those cards off. That's just compounding the problem, and she'll wind up paying a lot more on the debt going that route than just making those monthly payments. If you have the ability to make a payment on the accounts to get them current, you may want to do it, just to keep her from digging her scores further into the grave. Is she willing to turn over all their credit cards to you for safe keeping so they cannot charge any further and just continue making the monthly payments?

Link to comment
Share on other sites

Do not help her get a payday loan to pay those cards off. That's just compounding the problem, and she'll wind up paying a lot more on the debt going that route than just making those monthly payments. If you have the ability to make a payment on the accounts to get them current, you may want to do it, just to keep her from digging her scores further into the grave. Is she willing to turn over all their credit cards to you for safe keeping so they cannot charge any further and just continue making the monthly payments?

I told her NOT to get payday loan. They are both only a week late, I told her just to wait until they get paid next week and then make at least minimum payment. I like the idea of having them turn over the cards to me to hold onto, but I think I'm done offering to help. If she asks me to hold the cards I will, but I'm not going to offer.

Link to comment
Share on other sites

First of all it isn't your fault. It's no different than preaching to someone something and they get up and do the complete opposite. You tried to guide them and they didn't listen. DO NOT GET A PAYDAY LOAN TO HELP THEM! You know from your own experiences how it is not making wise financial choices. Some things people just have to learn from experience. Consider this a lesson they both will learn.

Link to comment
Share on other sites

DO NOT offer to hold her cards. Shred those damn things.

 

Pay down the cards as fast as they can. No more cards. No pay day loans. These kids should stick to cash.

 

Since they insist, let them fall flat on their faces. At least they only have 1 trade line each to clean up afterwards.

Link to comment
Share on other sites

Sounds like from this point forward, all cards remain in your possession. Also, I would report the cards lost and obtain replacements (that way the account numbers are changed and online purchases can't be made).

 

If they can't handle a Victoria's Secret and Fingerhut card, they obviously cannot handle credit at all and should stick to cash. Luckily, it sounds like you are close enough to your sister where you can hold onto her cards (or shred them, like chugs suggested) in order to keep some credit history on her reports.

Link to comment
Share on other sites

If they can't handle a Victoria's Secret and Fingerhut card, they obviously cannot handle credit at all and should stick to cash. Luckily, it sounds like you are close enough to your sister where you can hold onto her cards (or shred them, like chugs suggested) in order to keep some credit history on her reports.

 

That's what I was thinking. With the credit limit of a VS card obtained through the shopping card trick, even if it got maxed out, I can't imagine the minimum payment was much more than $25; same thing for Fingerhut. If your sister couldn't handle making two $25 payments, then I'm not sure what you can do about it.

 

If it were me, I'd distance myself from the situation entirely. You make a best effort to educate and help her, but she's got to face the music on her own. I wouldn't lend her money, bail her out, hold or cards or anything. That's just enabling her bad behavior. I know you love her, but enabling a loved-one does not help them, in the long run.

Link to comment
Share on other sites

i have done a lot worse for my sister than hold.her cards. holding cards isnt bad... she deserves another chance. dont you remember how awful it was to be in debt and have negative tradelines? i sure do and i wouldnt want it to happen if it can be avoided... it can. dont get me a wrong, i am an advocate for people learnong on their own.

 

i would offer to hold the cards, insist she try and remove lates if its not too late, and emphasize that shr can kiss that mortgage goodbye if she dont get her s*** straight.

 

Sent from my ZTE-Z990G using Tapatalk 2

Link to comment
Share on other sites

The last post in this topic was posted 3950 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share




  • Member Statistics

    • Total Members
      189567
    • Most Online
      2046

    Newest Member
    Bigboyjr2128
    Joined
×
×
  • Create New...

Important Information

Guidelines