DawgTalkers.net Forums DawgTalk Tailgate Forum Rebuilding bad credit?

A few years ago I went through a divorce and got stuck with thousands of dollars of credit card debt. I wasnt making a whole lot of money and was and still am paying 580 a month for child support on my son. Well needless to say between the other bills such as rent,food, gas and auto insurance I really didnt have a lot of extra money to pay the debt off. So my question is what are some things I can do to help start the rebuilding process of my score? Im about to get a newer car and was thinking of getting a prepaid credit card which I found out that the card is reported to the credit bureau so that will help a bit I guess. Anyother opinions or suggestions would greatly be appreciated.

Assuming you didn't file for bankruptcy, the only thing you can do is pay off the credit card debt as quickly as you can if you haven't already. After that, use it sparingly and pay it off in full every month.

You say that you don't have a lot of money left over ... but that you're about to get a newer car.

How will you afford the newer car? (assuming there's a loan on it) What are the terms on the newer car? What kind of interest rate?

Cars depreciate. They are one of the worst investments imaginable. (sorry GM)

If you are going to get into some obscene financial contract, my advice would be .... don't.

Cut back on every expense you can. Drop the cable. Stop taking drives "just because". Document every dollar you spend, and know what you spend where. That one can be painful ..... believe me, because I've done it. It's amazing how much money we throw away on a daily basis.

Set yourself up on a budget, and don't go off of it except for the direst of emergencies. Save something each pay ... even if it's only $10.

Paying off debt is the first step to rebuilding credit. I should say ... managing debt. You want some .. but not too much. You want to show a payment history ..... but not huge balances. I usually charge my gas. It runs up a small bill that gets paid off each month. I save for "big" purchases, (like a TV or computer) and buy them only when I can pay them off in the same billing cycle.

In the end, you need to find a plan that works for you that addresses the need to pay current bills, save money, plan for future expenses, and pay off the debt you already owe. If you cannot find one on your own, perhaps consumer credit counselling can help.

Good advice.

Well I kinda need a new car. I own a 1997 Explorer with 156k and its on its last leg. I recently got a part time job at UPS and that it how Im gonna afford to take on a car payment. I know my interest rate will be insane but I need to get something faast. I have saved over 1000.00 in the last 3 months so that will be the down payment along with whatever I get for the Exploder. I mean Explorer.

1488, You say you just got a part-time job with UPS, are you sure its a long term job? The reason i ask is cause UPS hires alot of seasonal employees this time of the year to get thru the holidays due to the extra load from all the x-mass packages being sent but then after the new year they let them go. As for as the new vehicle your getting if it was me i probably wouldn't get anything too new just something to last me 4 or 5 years and put all my extra money towards paying off that debt.

I have a 1992 Dodge Dakota Club Cab that I bought 3 years ago for $2000. It now had 90,000 miles on it. I don't want or need a $10,000 car right now.

I got rid of my convertable because I could not justify the monthly expense any longer .... and that was only $200/month. I ditched the cable, and saved $100/month. I paid off a small loan I had. I paid off my credit cards, I scrimpted and saved .... and was a miser for about 6 months. I damn near read by candlelight. lol I watched and recorded every penny I spent.

If it were me, I would look for the best car I could find for $1000 and buy it ..... even if it was butt ugly and pink. I would then put together a workable budget. I would include savings. If your car payment was going to be $250.month .... save that amount every month. Do this for a year and you'll have $3000 or so to put down on a better car .... or even to buy a better car straight out. I bought my mom a car for $3000, and it is absolutely beautiful, and had only 70,000 miles on it. If you can get through the year saving the amount of your car payment every month, it will also ensure that you can come up with that amount every month for the payment without injuring a different part of your finances.

I beat the seasonal date by a few months and as of Nov 19th I got my seniority date with the company so its long term. I also got my first raise and my supervisor is pushing me to take a zipcode test to get me an extra $1.00 an hr. Im loooking at a cobalt or dodge caliber at around 9k or so.

having some knowledge of the recruiting for UPS, you got yourself in the door to a helluva good company man,,,, If that goes FT for you, there is serious money and security working for them... good luck...

As for Credit repair.. be careful who you listen too.. each of us has a different story to tell.. the way FICO rates people, sometimes it's not wise to pay off all credit cards.. there is reason to keep some debt and pay it on time..

But your situation may be different than someone else.

There are plenty of places to go for credit counseling.. take advantage of those free services.. get advice that specifically matches your circumstances and can advance your short term as well as your long term goals...

Good luck and keep your head up.. You WILL get through this....

The very basic is to see what debt, if any, is late/behind/delinquent and get your debts to a 'current' status. That's the biggest step. From there, start working on paying them down.

Daman...to your point, 1488 would be wise to pay off any and all debt. For peace of mind, if nothing else. When it come to not paying off debt to keep credit score higher it is a bit of a misnomer. It won't hurt your credit score to pay it off, but you can decrease your credit score when you pay it off then close the account.

Any decrease in credit score due to paying off a car loan, debt etc... is only temporary and in the long haul a positive.

1488...YTown has given great advice. Payoff credit card, hopefully avoid buying/financing a new(er) car. That would actually increase your debt to equity, thereby decreasing your credit score. Missing your whole goal if you went this route.

Can't you use the $1000.00 to fix the Explorer? And continue to milk that ride for all it's worth?

As others have said PAY off your credit cards FIRST, but don't close them out. Go with the used car you can pay cash for, do not buy a new one and pay 25 percent interest.

OK so I did a credit report on myself and found out that the credit cards are charged off, but I do have a debt of 1364.00 . Its with a company by the name of LVNV. I researched them and are legit however with what I have read they dont accept payments and you have to pay the balance in full. Would it be a good idea to pay that with the money Ive saved for my down payment on a newer car? Damn divorces suck ass huh? ANyone please advice.

Find out what debt they bought. LVNV basically buys past due debt from banks and CC companies, and mostly charged-off accounts. They have have a bad history of ripping people off.

Request them to send you a "debt validation" to verify that they have the right to collect anything from you, and if not, ask them to remove the collection listing from your record.

Milk man, believe me I thought about fixing it but my friend who is a mech said dont bother. Transmission is going bad and I no longer have first gear and will cost around 2k to fix. Ive lost compression because my cat converter is clogged up and I have a miss in the engine somewhere. Ive already put plugs and wires on it about 7 thousand miles ago and its already acting up again and for some unknown reason I stall out on sharp right turns. To avoid this I take alot of damn left turns.

Thx for the heads up Florida, I'll give them a call tommorrow.

Then it sounds like it is time to buy the new car ...It may sound a bit shady, but in certain circumstances when a third party "takes over" your debt from a bank or creditor, a la LVNV, they assume all the risk. What I am getting at is that if you don' pay them any $ whatsoever it may never effect your credit score as they do not report to the credit bureaus. They eat the $ and that is the risk they took in buying your debt, but no harm to your FICO. I wouldn'l shell out the lump sum to pay them, that was their gamble. Hope this adds insight.

You have a PM.