Debt Questions

[sbpebbles]

A secured loan will have collateral (car, house, etc.)

A secured credit card is obtained by depositing a certain amount (say $500) with the lending institution and then your credit limit is that $500. You're securing the card with your own money. After 1-2 years, cards can sometimes be unsecured. If not, by that time you're ready to apply for an unsecured card separately.

and how do i go about applying for credit cards? I don't get offers in the mail, obviously, so what's the best way?

 

[BoogasMom]

I highly recommend Dave Ramsey's book, The Total Money Makeover, and then, when finances allow, Financial Peace University.

Another vote for this. (google my total money makeover - you can join the forums there for free for a week, good information about how to deal with old creditors, sample debt validation letters, etc to get you started.)

Yet another vote for this! My DH and I just finished listening to his Total Money Makeover on CDs and are now start Financial Peace University at our church. I HIGHLY recommend this!!!

 

[BoogasMom]

ALSO, forget any advice to follow Dave Ramsey. He's a fool that would rather have people have no credit history whatsoever. Great for anyone that wants or is able to pay cash for a house, a car, etc. but for vast majority of us, that ain't the case. It's fine to follow the basic advice in paying down active credit card debt (higher interest rate cards first) but that's just common sense.
/QUOTE]

Dave Ramsey is not a fool, or his advice wouldn't work for so many people.
And it DOES work. Hundreds of thousands, if not millions, of changed lives speak for themselves.

I agree 100%!!! If he was a fool, he wouldn't have as many success stories from those who have been in bad shape financially like the OP.

As for his principles being ONLY "common sense", there are millions of Americans out there who are lacking this "common sense" you write of. Apparently, I am one of them because I am getting a lot out of his advice.

 

[My3kiddos]

and how do i go about applying for credit cards? I don't get offers in the mail, obviously, so what's the best way?

Go directly to the credit card companies websites and apply. Capital One and Orchard Bank are a couple that will open accounts unsecured for people rebuilding their credit. Keep in mind you need to pay these off every month (or as soon as you make the purchase if you think you might spend the money) because the interest rates are going to be high until you rebuild your credit. And the reason I said earlier that you need to start now instead of waiting like others have suggested is because you're losing time if you wait. If you wait 3-5 years for the baddies to fall off your credit to start rebuilding then you've lost 3-5 years of having positive trade lines on your credit.

 

[JDUCKY]

and how do i go about applying for credit cards? I don't get offers in the mail, obviously, so what's the best way?

The best way is researching. Over at CB, look at the top of the page and you'll see a link named CreditPulls. You can search by FICO score or by creditor name or just by those that use only certain credit bureaus.

Also, looking thru the credit forum there, you'll soon pick up on the cards that are best for rebuilders.

There's also the CardFinder tool:
http://creditboards.com/cardfinder.php



As for those continuing to spout about Dave Ramsey, that advice is worthless for the OP as the OP is not mired in credit card debt but, rather, various accounts charged off and gone to collections. Cutting up a credit card won't do squat and tithing 10% sure isn't going to help when one has no job.

Dave Ramsey has gotten rich off of lazy people who don't want to face the facts of their growing/pyramiding of debt and don't want to do the common sense thing of restricting spending and paying down higher interest accounts first.

His "advice" will also not help someone to properly rebuild/restore/optimize their credit history and FICO score.

 

[My3kiddos]

I also wanted to chime in on Dave Ramsey. His advice is good if all you are wanting to do is get out of debt. It's great if you already have a mortgage and car payment and you just want to pay them off, but from what I understand the OP is going to need to obtain housing in the near future so rebuilding her credit is vital. You need to pay off the bad debts, but if you are going to need to obtain housing, whether it be a mortgage or renting, you have got to start getting positive lines on your credit report.

 

[JDUCKY]

Go directly to the credit card companies websites and apply. Capital One and Orchard Bank are a couple that will open accounts unsecured for people rebuilding their credit. Keep in mind you need to pay these off every month (or as soon as you make the purchase if you think you might spend the money) because the interest rates are going to be high until you rebuild your credit. And the reason I said earlier that you need to start now instead of waiting like others have suggested is because you're losing time if you wait. If you wait 3-5 years for the baddies to fall off your credit to start rebuilding then you've lost 3-5 years of having positive trade lines on your credit.

Exactly.

I got a Household Bank card about 6 months after my bankruptcy years ago. A year later I added an Orchard Card and a Target card. I also bought a car right after my BK and was able to refinance it to a much lower interest rate 3 years later.

Now my credit reports are clean, I have literally 10x more the credit limit I had just 6 years ago, have a brand new house and about to add a pool onto it.


Oh, and to the OP, I do wish you luck on those job leads!

 

[sbpebbles]

Go directly to the credit card companies websites and apply. Capital One and Orchard Bank are a couple that will open accounts unsecured for people rebuilding their credit. Keep in mind you need to pay these off every month (or as soon as you make the purchase if you think you might spend the money) because the interest rates are going to be high until you rebuild your credit. And the reason I said earlier that you need to start now instead of waiting like others have suggested is because you're losing time if you wait. If you wait 3-5 years for the baddies to fall off your credit to start rebuilding then you've lost 3-5 years of having positive trade lines on your credit.

I'm assuming I will need a job in order to get one right? I have other income but no job. I was taken to court by capital one but settled with them so idk if i can get a credit card through them again.. the civil claim for that is scheduled to stay on my record until Dec 2011

 

[JDUCKY]

I'm assuming I will need a job in order to get one right? I have other income but no job. I was taken to court by capital one but settled with them so idk if i can get a credit card through them again.. the civil claim for that is scheduled to stay on my record until Dec 2011

Search over at CB for WhyChat's Judgment dispute process.

You might be able to get it deleted before then. The key is if your address now is different. You need to dispute old addresses with Equifax and TransUnion (Experian will not remove old addresses if they're tied to an account on your report). Once those addresses are deleted, you can then dispute public records and they often fall right off!

 

[sbpebbles]

Search over at CB for WhyChat's Judgment dispute process.

You might be able to get it deleted before then. The key is if your address now is different. You need to dispute old addresses with Equifax and TransUnion (Experian will not remove old addresses if they're tied to an account on your report). Once those addresses are deleted, you can then dispute public records and they often fall right off!

the thing is my old credit report has a list of my previous addresses, one of which is where I am currently..If i understand you correctly Experian won't delete the address off if it's tied to say a phone bill account?

 

[My3kiddos]

I'm assuming I will need a job in order to get one right? I have other income but no job. I was taken to court by capital one but settled with them so idk if i can get a credit card through them again.. the civil claim for that is scheduled to stay on my record until Dec 2011

You probably shouldn't try Capital One then. Try Household or Orchard. You can use your other income as your income. It doesn't matter where the money comes from as long as it is a continuous income (they don't call and check). There are alot of others that I could point you to, but they charge outrageous opening fees, admin fees, etc.

Also I just wanted to tell you that I too made some stupid mistakes when I was young, but I've been able to rebuild my credit on my own without going to a credit counselor. You can do it. It just takes time, determination, and hard work. The debt validation letters are awesome btw. I had some stuff taken off mine years ago because the collection agency didn't have the paperwork to back up the debt. Don't forget too that collection agencies will sell your debt numerous times. Make sure you keep an eye on the date first delinquent. CA's will reage them and that is completely against the law and you can actually take them to court and they would have to pay you and take it off your credit. Most collection agencies are sleeze balls.

 

[sbpebbles]

You probably shouldn't try Capital One then. Try Household or Orchard. You can use your other income as your income. It doesn't matter where the money comes from as long as it is a continuous income (they don't call and check). There are alot of others that I could point you to, but they charge outrageous opening fees, admin fees, etc.

Also I just wanted to tell you that I too made some stupid mistakes when I was young, but I've been able to rebuild my credit on my own without going to a credit counselor. You can do it. It just takes time, determination, and hard work. The debt validation letters are awesome btw. I had some stuff taken off mine years ago because the collection agency didn't have the paperwork to back up the debt. Don't forget too that collection agencies will sell your debt numerous times. Make sure you keep an eye on the date first delinquent. CA's will reage them and that is completely against the law and you can actually take them to court and they would have to pay you and take it off your credit. Most collection agencies are sleeze balls.

Looks like I have a lot to learn..I'll try those credit card companies, since we DO have income coming in for me and the kids..I just want to fix my credit and keep it on the positive so this never happens again

 

[sbpebbles]

Which company should I get my records from first or does it not make a difference? Is there a way to set it up so I only get one report every 4 months or no? I'm hoping by the next 4 months to have a few of the debts paid off, the smaller ones

 

[JDUCKY]

Capital One has one advantage over the HSBC cards, for now. Every 3 months you'll be eligible for a CLI (credit limit increase). HSBC is not issuing CLIs across the board for all of its credit offerings (well, except maybe their top tier products for world travelers....) That might change in March (rumor has it) but that's how it is now.

 

[JDUCKY]

Which company should I get my records from first or does it not make a difference? Is there a way to set it up so I only get one report every 4 months or no? I'm hoping by the next 4 months to have a few of the debts paid off, the smaller ones

Get it from all 3 bureaus at once.

You can only get your free report more than once per year if you live in certain states.

 

[My3kiddos]

Which company should I get my records from first or does it not make a difference? Is there a way to set it up so I only get one report every 4 months or no? I'm hoping by the next 4 months to have a few of the debts paid off, the smaller ones

All of them have the potential to be different. Some companies report to every credit bureau some only report to 1. They all score differently too. If you ever want to get a credit score go to myfico, don't buy the ones from places like creditreport.com. I've found those to be completely different than myfico. To answer your question I would pull them all at once and compare them, fix an discrepencies, and go from there. Also if and when you apply for a credit card and if you are denied you can get a free credit report from whatever company they use to pull your credit.

 

[JDUCKY]

All of them have the potential to be different. Some companies report to every credit bureau some only report to 1. They all score differently too. If you ever want to get a credit score go to myfico, don't buy the ones from places like creditreport.com. I've found those to be completely different than myfico. To answer your question I would pull them all at once and compare them, fix an discrepencies, and go from there. Also if and when you apply for a credit card and if you are denied you can get a free credit score from whatever company they use to pull your credit.

Only EQ and TU FICO scores can be bought at myfico.com. Experian no longer allows their score to be obtained there. Some financial institutions offer a free EX FICO score (like certain credit unions...that's how I get mine now ) there are usually discount codes for 20-25% off, too...just google.

 

[sbpebbles]

Only EQ and TU FICO scores can be bought at myfico.com. Experian no longer allows their score to be obtained there. Some financial institutions offer a free EX FICO score (like certain credit unions...that's how I get mine now ) there are usually discount codes for 20-25% off, too...just google.

yea I don't think i'm too worried about my score yet..not til i start getting things fixed