Debt Dumpers - 2016

[TheGryphonsDen]

I've been following/posting over the last two sets of these threads, but have a brand new question (based on a huge life change).

I moved to the US (from Canada) last month and this "no US credit" thing is getting really, really annoying. I do have US bank accounts (checking and savings) and a US credit card (because TD is Canadian they are willing/able to use my Canadian credit score when I applied). But my credit score, TD shows it when I check into my account, is literally 0 (not 300 but actually 0).

I will be setting up internet/TV/phone this week and move into my apartment as well (and paying security deposits on all of them because of the "no credit" thing) which I assume will help as I start paying those bills/rent, but what other ways can I start building my credit? I had/have excellent Canadian credit, so I've not worried before (and US and Canada differ here). Many of the "improve" credit suggestions don't really work for "starting" credit and I'd love any suggestions that people have. I couldn't even get a Macy's card!

Sorry if I'm intruding on the thread, I would love to join if you're all okay with it. I just had to comment on this because I have the exact opposite situation. I am originally from the US and moved to Canada in 2006 which makes me a legal US Citizen and Canadian Resident. I had all US cards and accounts and had issues with getting set up in Canada. It is very frustrating, but it does get better! I have essentially had to build credit in both countries and although it is a huge pain- there are some tricks.

US Credit building is tricky because your credit is linked to a Social Security Number that tracks your finances. When you are new to the country, that is a big kick in the pants. You have started out right by having your card and utilities, but you aren't going to have much luck with establishing credit for the first 6 months. You are actually doing really well by getting the utilities set up and having a few accounts. It will be frustrating, but spending then paying off amounts on your charge, keeping your accounts in good standing and paying your bills will build your credit now. In about six months you will likely begin getting credit offers in the mail. Store credit cards are a good way to begin, but you can also check with companies that operate on both sides of the border like mBna as well. I found them to be helpful both times because they often give out starter credit cards for teenagers, so they will sometimes do a small $500 card or something to start you out and help get your credit scores up. I essentially charged groceries or school clothes, then paid it off. Repeat the next month. It is tedious and frustrating, but it does work. Amex and a few other companies also have cards that have to be paid monthly, but they are specifically designed to help build credit. Another trick is to find apps or credit cards advertised through universities because they are designed for this reason.

Basically, hang in there. It will get better, but it isn't a speedy process. You are doing the right things. =)

 

[BernardandMissBianca]

I don't have any suggestions about the cash envelopes, but as far as Dave Ramsey goes, have you read any of his books instead? I agree that I really don't like his show as I do think he can be very condescending. I still get that vibe a little from Total Money Makeover, but definitely not as bad. Plus I enjoyed reading the stories of real people paying down debt throughout. You may like that better.

I have heard bits and pieces about total money makeover. I will look to see if I can preview it on amazon before buying it. The peoples stories are why I still listen to his show, normal every day people like me are winning the battle. I also did learn about non conforming mortgages from his show which I didn't know what that meant. We are looking at refinancing through our bank so knowing the difference is helping to make a decision about what kind of loan to get. We've been trying to do this for years but between the mortgage getting sold twice and now needing a new roof, we've had to put it off. I am determined to make 2016 the year to get out from under Nation Star.

You could always figure out your budget for gas, food and dining - take out of your bank and use cash for that. This way your not clearing out your bank account. Or if your able you could keep it in the bank and continue using your debit card and have a sheet that has your budgeted amount - each receipt deduct from that budgeted amount and this way you don't have to take it out of the bank but your still deducting from the budgeted amount.

Virtual money is definitely my downfall so I want to use actual envelopes but pulling the top 3 is a good idea. I figure my biggest budgets are food, gas and eating out. We really need to curb the eating out and I'm hoping this will help.
I also need to figure out how to divide groceries and household when I buy at one store, or if I should lump it into one. Household being laundry detergent, toilet paper, etc. Thankfully Target receipts do that for me already, not sure if Stop and Shop does.

 

[SirDuff]

Sorry if I'm intruding on the thread, I would love to join if you're all okay with it. I just had to comment on this because I have the exact opposite situation. I am originally from the US and moved to Canada in 2006 which makes me a legal US Citizen and Canadian Resident. I had all US cards and accounts and had issues with getting set up in Canada. It is very frustrating, but it does get better! I have essentially had to build credit in both countries and although it is a huge pain- there are some tricks.

US Credit building is tricky because your credit is linked to a Social Security Number that tracks your finances. When you are new to the country, that is a big kick in the pants. You have started out right by having your card and utilities, but you aren't going to have much luck with establishing credit for the first 6 months. You are actually doing really well by getting the utilities set up and having a few accounts. It will be frustrating, but spending then paying off amounts on your charge, keeping your accounts in good standing and paying your bills will build your credit now. In about six months you will likely begin getting credit offers in the mail. Store credit cards are a good way to begin, but you can also check with companies that operate on both sides of the border like mBna as well. I found them to be helpful both times because they often give out starter credit cards for teenagers, so they will sometimes do a small $500 card or something to start you out and help get your credit scores up. I essentially charged groceries or school clothes, then paid it off. Repeat the next month. It is tedious and frustrating, but it does work. Amex and a few other companies also have cards that have to be paid monthly, but they are specifically designed to help build credit. Another trick is to find apps or credit cards advertised through universities because they are designed for this reason.

Basically, hang in there. It will get better, but it isn't a speedy process. You are doing the right things. =)

Thanks! And thanks everyone else (sorry, things have been a bit crazy and haven't had a chance to reply). My current credit is with TD (so one that operates on both sides of the border - which is the only reason I could get it (they were willing to use my Canadian credit). Slowly but surely it is.

 

[Jen and Ashwin]

Sorry if I'm intruding on the thread, I would love to join if you're all okay with it. I just had to comment on this because I have the exact opposite situation. I am originally from the US and moved to Canada in 2006 which makes me a legal US Citizen and Canadian Resident. I had all US cards and accounts and had issues with getting set up in Canada. It is very frustrating, but it does get better! I have essentially had to build credit in both countries and although it is a huge pain- there are some tricks.

US Credit building is tricky because your credit is linked to a Social Security Number that tracks your finances. When you are new to the country, that is a big kick in the pants. You have started out right by having your card and utilities, but you aren't going to have much luck with establishing credit for the first 6 months. You are actually doing really well by getting the utilities set up and having a few accounts. It will be frustrating, but spending then paying off amounts on your charge, keeping your accounts in good standing and paying your bills will build your credit now. In about six months you will likely begin getting credit offers in the mail. Store credit cards are a good way to begin, but you can also check with companies that operate on both sides of the border like mBna as well. I found them to be helpful both times because they often give out starter credit cards for teenagers, so they will sometimes do a small $500 card or something to start you out and help get your credit scores up. I essentially charged groceries or school clothes, then paid it off. Repeat the next month. It is tedious and frustrating, but it does work. Amex and a few other companies also have cards that have to be paid monthly, but they are specifically designed to help build credit. Another trick is to find apps or credit cards advertised through universities because they are designed for this reason.

Basically, hang in there. It will get better, but it isn't a speedy process. You are doing the right things. =)

DH and I got married in August and he moved here from Canada. I am really concerned with building up his credit score so that when he is ready to get a loan for a new car, he won't have a problem. Once he got his social security number in December, he tried applying for a "starter" credit card through Capital One, but he was rejected because he essentially had no credit score. We called Capital One and they suggested that he be added as an authorized user on my card because they report to his credit bureau accounts each month (I wish I had known that first, because not all credit card companies do this for authorized users). I also added him to my Amex card as an authorized user and it seems they report to credit bureaus as well. I went on Credit.com and checked his free score and it is showing as 770 (though this isn't an official FICO score, but a TransUnion score). Seems very high to me considering he has almost no credit history, so I'm not sure it will stay up here or dip down again, but my high credit score is probably helping to boost his up.

I would say getting on as an authorized user on another person's card (if they have excellent credit) is the best way to build credit. So if that is possible, I would try going that route.

 

[SirDuff]

DH and I got married in August and he moved here from Canada. I am really concerned with building up his credit score so that when he is ready to get a loan for a new car, he won't have a problem. Once he got his social security number in December, he tried applying for a "starter" credit card through Capital One, but he was rejected because he essentially had no credit score. We called Capital One and they suggested that he be added as an authorized user on my card because they report to his credit bureau accounts each month (I wish I had known that first, because not all credit card companies do this for authorized users). I also added him to my Amex card as an authorized user and it seems they report to credit bureaus as well. I went on Credit.com and checked his free score and it is showing as 770 (though this isn't an official FICO score, but a TransUnion score). Seems very high to me considering he has no credit history, so I'm not sure it will stay up here or dip down again, but my high credit score is probably helping to boost his up.

I would say getting on as an authorized user on another person's card (if they have excellent credit) is the best way to build credit. So if that is possible, I would try going that route.

Unfortunately, I don't know anyone here well enough to ask them to do that (I moved for work, but moved alone). Great suggestion though.

 

[momtosam]

Just wanted to say high to everyone! Nothing new to report.

 

[gracie1]

Sorry if I'm intruding on the thread, I would love to join if you're all okay with it. I just had to comment on this because I have the exact opposite situation. I am originally from the US and moved to Canada in 2006 which makes me a legal US Citizen and Canadian Resident. I had all US cards and accounts and had issues with getting set up in Canada. It is very frustrating, but it does get better! I have essentially had to build credit in both countries and although it is a huge pain- there are some tricks.

US Credit building is tricky because your credit is linked to a Social Security Number that tracks your finances. When you are new to the country, that is a big kick in the pants. You have started out right by having your card and utilities, but you aren't going to have much luck with establishing credit for the first 6 months. You are actually doing really well by getting the utilities set up and having a few accounts. It will be frustrating, but spending then paying off amounts on your charge, keeping your accounts in good standing and paying your bills will build your credit now. In about six months you will likely begin getting credit offers in the mail. Store credit cards are a good way to begin, but you can also check with companies that operate on both sides of the border like mBna as well. I found them to be helpful both times because they often give out starter credit cards for teenagers, so they will sometimes do a small $500 card or something to start you out and help get your credit scores up. I essentially charged groceries or school clothes, then paid it off. Repeat the next month. It is tedious and frustrating, but it does work. Amex and a few other companies also have cards that have to be paid monthly, but they are specifically designed to help build credit. Another trick is to find apps or credit cards advertised through universities because they are designed for this reason.

Basically, hang in there. It will get better, but it isn't a speedy process. You are doing the right things. =)

Welcome! We're glad to have you on this thread!!

 

[gracie1]

DH and I got married in August and he moved here from Canada. I am really concerned with building up his credit score so that when he is ready to get a loan for a new car, he won't have a problem. Once he got his social security number in December, he tried applying for a "starter" credit card through Capital One, but he was rejected because he essentially had no credit score. We called Capital One and they suggested that he be added as an authorized user on my card because they report to his credit bureau accounts each month (I wish I had known that first, because not all credit card companies do this for authorized users). I also added him to my Amex card as an authorized user and it seems they report to credit bureaus as well. I went on Credit.com and checked his free score and it is showing as 770 (though this isn't an official FICO score, but a TransUnion score). Seems very high to me considering he has almost no credit history, so I'm not sure it will stay up here or dip down again, but my high credit score is probably helping to boost his up.

I would say getting on as an authorized user on another person's card (if they have excellent credit) is the best way to build credit. So if that is possible, I would try going that route.

That credit score is more than likely correct. My dad has only ever had a car loan and opened one credit card for his lawn mower because I told him he needed to build credit. He is an all cash man. He kept the balance (0% interest) for two months and paid it off. His truck loan was paid off like 8 years ago but his credit score is around 825. So that seems right with your dh.

 

[Miss Whimsy]

I think Friday's paycheck will allow me to pay off the final $400 of my last student loan. I've fiddled with the numbers like 50 times in YNAB, waiting to get paid, and I think it's gonna happen.

 

[Marlyn]

Sorry if I'm intruding on the thread, I would love to join if you're all okay with it.

 

[Gena001]

So I've been listening to Dave Ramsey on the radio on my way to get the boys from Fencing and while I don't really like him (his tone can be very condescending) it has helped to keep our finances in the front of my mind. I also try to visit the Gail Vaz-Oxlade site at least once a week. And I have a lot of her books on my iPad.

Last night I sat down and looked at his baby steps, and made some lists and goals. I wrote out our debt snowball, and also some cash envelopes ideas.
Next is to figure out a budget. This is the hardest part for me, I have no idea what dollar amount to assign each category and the thought of going through 6 months worth of credit statements and my bank statements is daunting but I'm going to take it 1 month at a time. Even if I get 3 months, I will have a rough idea on what we spend.

I also need suggestions on how to start cash envelopes. I can't pull all our money out of the bank because we do have some auto payments set up. But I'm not sure what categories and how much to put in each envelope.

In other news, we got our fed refund check, still waiting on the state. I paid a bunch of random bills, ordered some parts for DS19's truck, and tidied up some loose ends. Lowes is coming out to fix my dishwasher (should be under warranty), called to have our septic pumped (he will be here tomorrow), called to square away a hospital bill I paid and they keep trying to send to collections (thankfully I kept the confirmation number), and next I'm going to order the replacement shelf for my fridge (plastic part broke). and called my car insurance and they are sending me my deductible so I can get my car fixed, the insurance from the lady that hit me was dragging it's feet but I finally got them to accept fault.
Oh and the roof guy came out to give us a quote, still waiting on that number.

Shhhhh, don't tell the universe but I finally have some things coming together.

GOOD FOR YOU!!!

As for starting cash envelopes.... when I'm at the store purchasing groceries and I get cash back... I take $10 here and there to stuff in some of my envelopes... life insurance, Christmas, birthdays... etc.

 

[Gena001]

Just wanted to say high to everyone! Nothing new to report.

 

[bcwife76]

@TheGryphonsDen welcome welcome!!!

 

[mrsabbott]

So, I have listened to Dave Ramsey on the radio before and read articles.. but I've never attended FPU or read his books. I never catch his show on the radio anymore, and don't have the extra cash to spend on attending FPU, but I found this on youtube and started listening to it last night. It is his complete audiobook!

There are also things on youtube that, I am assuming, are parts of his FPU. I am trying to stay motivated with my debt snowball plan, so I thought listening to his advice might be helpful. And, best of all, it is free!!

 

[DisneyMandC]

DH and I got married in August and he moved here from Canada. I am really concerned with building up his credit score so that when he is ready to get a loan for a new car, he won't have a problem. Once he got his social security number in December, he tried applying for a "starter" credit card through Capital One, but he was rejected because he essentially had no credit score. We called Capital One and they suggested that he be added as an authorized user on my card because they report to his credit bureau accounts each month (I wish I had known that first, because not all credit card companies do this for authorized users). I also added him to my Amex card as an authorized user and it seems they report to credit bureaus as well. I went on Credit.com and checked his free score and it is showing as 770 (though this isn't an official FICO score, but a TransUnion score). Seems very high to me considering he has almost no credit history, so I'm not sure it will stay up here or dip down again, but my high credit score is probably helping to boost his up.

I would say getting on as an authorized user on another person's card (if they have excellent credit) is the best way to build credit. So if that is possible, I would try going that route.

Not sure what the best options are on getting credit cards, but I know some places offer "secured" cards you can get (not sure if that's what you meant by starter card). It's something to the effect of you give the bank $200 or something like that towards the card and they hold it and you're able to use the card and that pays it off. I think that's how it works, but don't quote me on that.

Something else you can do, which might some counterintuitive, is to get him several credit cards if you're looking to raise his score quickly. You put a small amount on each card each month, maybe your groceries on one card, gas on another, all things you can pay off. Pay each card in full this month. This shows him as having multiple on time payments over the course of the year, as opposed to having just one each month. That would raise his score faster.

 

[Shmily1]

I have heard bits and pieces about total money makeover. I will look to see if I can preview it on amazon before buying it. The peoples stories are why I still listen to his show, normal every day people like me are winning the battle. I also did learn about non conforming mortgages from his show which I didn't know what that meant. We are looking at refinancing through our bank so knowing the difference is helping to make a decision about what kind of loan to get. We've been trying to do this for years but between the mortgage getting sold twice and now needing a new roof, we've had to put it off. I am determined to make 2016 the year to get out from under Nation Star.



Virtual money is definitely my downfall so I want to use actual envelopes but pulling the top 3 is a good idea. I figure my biggest budgets are food, gas and eating out. We really need to curb the eating out and I'm hoping this will help.
I also need to figure out how to divide groceries and household when I buy at one store, or if I should lump it into one. Household being laundry detergent, toilet paper, etc. Thankfully Target receipts do that for me already, not sure if Stop and Shop does.

A great way to tell what you are spending money on so that you can curb what is excessive to you is to use YNAB. It is a great tool to keep track of spending and budgeting all in one place. It really does make a difference.

 

[DisneyMandC]

A great way to tell what you are spending money on so that you can curb what is excessive to you is to use YNAB. It is a great tool to keep track of spending and budgeting all in one place. It really does make a difference.

I second this. DH and I aren't really even using YNAB as we should by sticking precisely to the budget for each line item each month, but it has already been a tremendous help. We realized we were spending way too much eating out and have been able to scale that back quite a bit. I love that at the end of the month after all the bills are paid I know exactly how much I have left in my budget to put towards debt.

 

[TheGryphonsDen]

Thanks for the welcome! I have been fighting an uphill battle with our debt load since about 2010, but I think we are finally reaching the light at the end of the tunnel. We didn't have a ton of debt, but for everything I paid, the debt came right back because my youngest had cancer. Fortunately we were living in Canada so we didn't have too many medical expenses to add to the pile, but it still adds up fast. So here is my debt in a nutshell:

We have about $50K in debt that goes away and comes back. I can't ever seem to make it go away completely and about 13K is consistently on our mastercard. On top of this, the medical stuff and stress has gotten us to the point where we have debated divorcing. We decided to both try, but agreed that we need to vacation this year and see if it helps some. We live pretty remote, so we don't go out often and rarely eat out, which makes the debt part better but the relationship part suck. Last month I decided to price out vacations to see if this was even possible and even with the crappy Canadian exchange rate, it will still be cheaper for us to drive to Port Canaveral, visit family on the way, take a 3 day Bahamian cruise and drive home then it is to even travel here in Canada. It looks like the estimate for the entire trip will be about $4000-$5000, but I always do a lot to cut the cost along the way. My goal is to pay off the vacation, pay down a huge chunk (if not all) of the credit card debt in 2016 and then really get to the low interest stuff in 2017.

In the past we tried the cash jar/ money envelope systems and unfortunately they didn't work at all for us. Those systems are all based on tracking your cash, so you have to have receipts or write it down. I did it for about 6 months and found I spent a lot of time asking my husband where this money or that money went. We even tried just giving him his own envelope to spend money, but we felt like we were constantly having to ask one another for money and since we aren't big spenders it just added guilt for necessary expenses. It clearly works for a lot of people, but we sort of came up with our own system to pay things down and it has worked twice, but we have had big Murphy's that popped up before we could get an emergency fund together that would cover it. I am super nerdy, but I have a budget spreadsheet that calculates our specific expenses and that is what I have been using to keep track. It isn't exact, but it seems to be helping to cover the little things that pop up while paying down the existing debt. I'm going to stick with it for awhile and see how things go, but I'm always looking for suggestions or tips. Adulting sucks sometimes. =)

 

[TheGryphonsDen]

Not sure what the best options are on getting credit cards, but I know some places offer "secured" cards you can get (not sure if that's what you meant by starter card). It's something to the effect of you give the bank $200 or something like that towards the card and they hold it and you're able to use the card and that pays it off. I think that's how it works, but don't quote me on that.

There are secured cards and I have heard they are good for building credit, but I'm talking about regular cards that they promote for low credit/no credit history clients. Essentially they are the cards that were being criticized because people were getting them in the mail for small children at one point. (That has changed since the housing crash and credit interest rate hike.) Anyway, they advertise at sporting events or university campuses that you can sign up for a charge and you apply as you would any other card. When they respond, you will only have about $500 of credit available on the card at a high interest rate. Basically you charge on that and pay it that month so you don't get nailed for the crazy high interest, but it will build up your credit. After a few months, you can call (or more often than not, they will call wanting to increase your limit) and you ask for decreased interest or better credit options through that same company. I basically did that until my rating was up, then found a card with a better deal and asked the company if they could match the offer since I had started with them. They matched it and I kept the card.

 

[LinderInWonderland]

I have heard bits and pieces about total money makeover. I will look to see if I can preview it on amazon before buying it. The peoples stories are why I still listen to his show, normal every day people like me are winning the battle. I also did learn about non conforming mortgages from his show which I didn't know what that meant. We are looking at refinancing through our bank so knowing the difference is helping to make a decision about what kind of loan to get. We've been trying to do this for years but between the mortgage getting sold twice and now needing a new roof, we've had to put it off. I am determined to make 2016 the year to get out from under Nation Star.



Virtual money is definitely my downfall so I want to use actual envelopes but pulling the top 3 is a good idea. I figure my biggest budgets are food, gas and eating out. We really need to curb the eating out and I'm hoping this will help.
I also need to figure out how to divide groceries and household when I buy at one store, or if I should lump it into one. Household being laundry detergent, toilet paper, etc. Thankfully Target receipts do that for me already, not sure if Stop and Shop does.

Once we started tracking our money, I could easily see that the bulk of our discretionary spending was on eating out and 'things' we didn't really need. Now that I have broken out some 'personal' money into our budget (essentially an allowance for myself and DH), we have less on the 'general spending' line which naturally curbs our eating out.

I also buy household goods at our grocery store, so they're combined in one category.