Credit repair

Credit repair

Joined: May 25th, 2006, 10:01 pm

December 9th, 2011, 1:25 pm #1

This is where we find ourselves. I welcome your input/advice/experiences.

I start paying back student loans next month. At my current income, it will take all of my paycheck and possibly more to pay them. Bummer, but that's life in part time social work, I guess. I could consolidate the loans and possibly pay less per month, but then I'd just pay for longer, and I don't want to do that, either. I am hoping to pick up more hours at work, but that is uncertain. But that's not the real dilemma.

In October, I applied for and received PLUS loans to pay for Katie's college. She will pay us back, but because she is still a dependent, she was not eligible for private loans, and we make too much for more financial aid. She has chosen an expensive school. That's on her, but here's the problem: When I did, it must have knocked my credit score into the basement or something. I haven't done a credit report check yet (which company do I do that through?), but ALL of our credit cards jumped up in rate and all of them lowered the available balance to what we owed. No problem there because we weren't using them anymore anyway, but MAN! I've got a couple at 23.99% now that were like 7.9 before!

I considered a line of credit to pay off the debt at a lower interest rate, but I hate to do that because I obviously am not good about staying away from the ccs and am afraid I will "need" something and end up with the line of credit AND more cc debt.

Let me say that all of our payments everywhere are up to date and we are in the snowball process, etc. No one is knocking on our door, we are not getting threatening calls, etc. But we are at that point where we are feeling the weight of the debt, and not much is going toward principle in our payments with the interest rates up so high. We've never experienced this before, so we are wondering what the best step is. Just plug away at them old school style? I don't want to do a balance transfer--that's what two of these ccs were and now they are through the roof in interest. would have been better off to leave the balances on the old cards at this point! (although they may have jumped, too)

if we look into a heloc, will that alert our mortgage company to the higher interest rates and cause our mortgage rates to go up? (As in, do they do that, too, like the ccs did?) Everything I read says that we are eligible for a lower interest rate on our home which would save us about $300 a month in payments, but I'm afraid of refinancing if our credit score has taken such a hit.

What would you do?

Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
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Joined: May 28th, 2006, 3:48 am

December 9th, 2011, 2:05 pm #2

Ask why the interest rate went up and if they will lower it again. I know my credit card interest rate will balloon if I miss even one payment, so is it possible that that happened? They may not lower the rate, but it's worth a try.

When we applied to rent this house we needed to show all three credit scores. I think we used equifax and it was something like $25. Make sure you're getting a one time score and not signing up for them to monitor your credit for $x per month.

Is your house worth more than your mortgage? If there's no equity, there's no home equity line of credit.

Sending positive thoughts!
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Joined: June 5th, 2006, 5:33 pm

December 9th, 2011, 2:43 pm #3

just to ask why. May be something you can correct.

p.s. I get my free annual credit reports from annualcreditreport.com. It's FTC approved. There is a place in the form where you can request your score for a fee.

------
The road to success is always under construction.
Last edited by TxNet on December 9th, 2011, 2:45 pm, edited 1 time in total.
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Joined: May 25th, 2006, 10:01 pm

December 9th, 2011, 3:05 pm #4

This is where we find ourselves. I welcome your input/advice/experiences.

I start paying back student loans next month. At my current income, it will take all of my paycheck and possibly more to pay them. Bummer, but that's life in part time social work, I guess. I could consolidate the loans and possibly pay less per month, but then I'd just pay for longer, and I don't want to do that, either. I am hoping to pick up more hours at work, but that is uncertain. But that's not the real dilemma.

In October, I applied for and received PLUS loans to pay for Katie's college. She will pay us back, but because she is still a dependent, she was not eligible for private loans, and we make too much for more financial aid. She has chosen an expensive school. That's on her, but here's the problem: When I did, it must have knocked my credit score into the basement or something. I haven't done a credit report check yet (which company do I do that through?), but ALL of our credit cards jumped up in rate and all of them lowered the available balance to what we owed. No problem there because we weren't using them anymore anyway, but MAN! I've got a couple at 23.99% now that were like 7.9 before!

I considered a line of credit to pay off the debt at a lower interest rate, but I hate to do that because I obviously am not good about staying away from the ccs and am afraid I will "need" something and end up with the line of credit AND more cc debt.

Let me say that all of our payments everywhere are up to date and we are in the snowball process, etc. No one is knocking on our door, we are not getting threatening calls, etc. But we are at that point where we are feeling the weight of the debt, and not much is going toward principle in our payments with the interest rates up so high. We've never experienced this before, so we are wondering what the best step is. Just plug away at them old school style? I don't want to do a balance transfer--that's what two of these ccs were and now they are through the roof in interest. would have been better off to leave the balances on the old cards at this point! (although they may have jumped, too)

if we look into a heloc, will that alert our mortgage company to the higher interest rates and cause our mortgage rates to go up? (As in, do they do that, too, like the ccs did?) Everything I read says that we are eligible for a lower interest rate on our home which would save us about $300 a month in payments, but I'm afraid of refinancing if our credit score has taken such a hit.

What would you do?

Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
I called right away when I saw the interest rate had jumped. They told me that my credit score had changed, so they changed the %. It was not an option to have them lower it. I was ticked! I'm also worried that Katie will not be able to finish at this school. What if the dept of ed won't loan to us next year because of credit ratings? Very frustrating. Most of our debt is student loans--mine, son's PLUS and now Katie's PLUS. We also have cc debt, though, too--obviously.

We do have equity, but I'm not sure how much. The last time the house was appraised, it appraised for about $55,000 more than we currently owe, but that was before the market took such a hit, so not sure what the appraisal would be now.


Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
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Joined: September 24th, 2009, 3:01 pm

December 9th, 2011, 4:30 pm #5

This is where we find ourselves. I welcome your input/advice/experiences.

I start paying back student loans next month. At my current income, it will take all of my paycheck and possibly more to pay them. Bummer, but that's life in part time social work, I guess. I could consolidate the loans and possibly pay less per month, but then I'd just pay for longer, and I don't want to do that, either. I am hoping to pick up more hours at work, but that is uncertain. But that's not the real dilemma.

In October, I applied for and received PLUS loans to pay for Katie's college. She will pay us back, but because she is still a dependent, she was not eligible for private loans, and we make too much for more financial aid. She has chosen an expensive school. That's on her, but here's the problem: When I did, it must have knocked my credit score into the basement or something. I haven't done a credit report check yet (which company do I do that through?), but ALL of our credit cards jumped up in rate and all of them lowered the available balance to what we owed. No problem there because we weren't using them anymore anyway, but MAN! I've got a couple at 23.99% now that were like 7.9 before!

I considered a line of credit to pay off the debt at a lower interest rate, but I hate to do that because I obviously am not good about staying away from the ccs and am afraid I will "need" something and end up with the line of credit AND more cc debt.

Let me say that all of our payments everywhere are up to date and we are in the snowball process, etc. No one is knocking on our door, we are not getting threatening calls, etc. But we are at that point where we are feeling the weight of the debt, and not much is going toward principle in our payments with the interest rates up so high. We've never experienced this before, so we are wondering what the best step is. Just plug away at them old school style? I don't want to do a balance transfer--that's what two of these ccs were and now they are through the roof in interest. would have been better off to leave the balances on the old cards at this point! (although they may have jumped, too)

if we look into a heloc, will that alert our mortgage company to the higher interest rates and cause our mortgage rates to go up? (As in, do they do that, too, like the ccs did?) Everything I read says that we are eligible for a lower interest rate on our home which would save us about $300 a month in payments, but I'm afraid of refinancing if our credit score has taken such a hit.

What would you do?

Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
btdt

we hocked the house to pay off cc's then nickel and dimed ourselves back to max cc debt... you know you'll do the same.

the "good" thing about being maxed out - you cannot keep borrowing, and when the well is dry you have no choices left. the thing about robbing peter to pay paul is that eventually Peter kicks you out the door.

I know you love your kids, but do not borrow another penny on their behalf. there ARE tough choices when it comes to schools. I knew i wasn't going to my first 6 choices for college bc i knew there was no money coming from mom and dad (who COULD afford it without borrowing a red cent) The resentment went away quickly. i went to a cheap state school and found that my degree was worth just as much with a good GPA as a name brand school would have been. All I missed out on was the "who you know" aspect of things - which has never appealed to me.

We BEGGED Chase for lower interest rates for five years. they kept saying no no no. once we defaulted - badly - THEN they told us we ere eligible for their "hardship" programs. Same with American Express, Discover and Capitol One. -er's. if they'd put us in their hardship programs (they still get interest) we'd be a year from being out of cc debt. instead it's 5 more years. Call again. beg. cry. cry alot. call every week. then curse out the congress that passed credit card "reform" promising the cc companies wouldn't screw us EXACTLY like this.

Sorry you are in this boat with me, it's a LONG haul...

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Joined: May 30th, 2006, 2:01 pm

December 9th, 2011, 7:07 pm #6

This is where we find ourselves. I welcome your input/advice/experiences.

I start paying back student loans next month. At my current income, it will take all of my paycheck and possibly more to pay them. Bummer, but that's life in part time social work, I guess. I could consolidate the loans and possibly pay less per month, but then I'd just pay for longer, and I don't want to do that, either. I am hoping to pick up more hours at work, but that is uncertain. But that's not the real dilemma.

In October, I applied for and received PLUS loans to pay for Katie's college. She will pay us back, but because she is still a dependent, she was not eligible for private loans, and we make too much for more financial aid. She has chosen an expensive school. That's on her, but here's the problem: When I did, it must have knocked my credit score into the basement or something. I haven't done a credit report check yet (which company do I do that through?), but ALL of our credit cards jumped up in rate and all of them lowered the available balance to what we owed. No problem there because we weren't using them anymore anyway, but MAN! I've got a couple at 23.99% now that were like 7.9 before!

I considered a line of credit to pay off the debt at a lower interest rate, but I hate to do that because I obviously am not good about staying away from the ccs and am afraid I will "need" something and end up with the line of credit AND more cc debt.

Let me say that all of our payments everywhere are up to date and we are in the snowball process, etc. No one is knocking on our door, we are not getting threatening calls, etc. But we are at that point where we are feeling the weight of the debt, and not much is going toward principle in our payments with the interest rates up so high. We've never experienced this before, so we are wondering what the best step is. Just plug away at them old school style? I don't want to do a balance transfer--that's what two of these ccs were and now they are through the roof in interest. would have been better off to leave the balances on the old cards at this point! (although they may have jumped, too)

if we look into a heloc, will that alert our mortgage company to the higher interest rates and cause our mortgage rates to go up? (As in, do they do that, too, like the ccs did?) Everything I read says that we are eligible for a lower interest rate on our home which would save us about $300 a month in payments, but I'm afraid of refinancing if our credit score has taken such a hit.

What would you do?

Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
Go to your credit union, sit down with them and see what they can do to help you. Our credit union saved us at the end of our construction project. We needed faux stone (required by our HOA covenents) and carpet. We were approved to increase our HELOC, so I went ahead and ordered those things on my Frontier Master Card (woohoo more miles right?). Well, the housing market tanked (2008) and our HELOC approval was rescinded. I had 27K on a credit card at 25% interest. I used that card to get miles and paid it off every month, so I never concerned myself with the interest rate...until that moment of course! LOL!

Our credit union gave us a personal loan at 7%. No one else would have done that. Your credit score goes down the higher your credit utilization. Meaning, if you have two credit cards with 10K limits and you have balances of $2K, your utilization is only 10% and that helps your score. If you have those cards maxed out, it hurts your score. Installment loans, like personal loans or car loans really help your score. There is a lot out there about credit scores. It might be worth it to you to read up. Look for Liz Weston. I've heard her books are good.

In the meantime, go to your credit union. They might be able to help. I agree with what Christine says regarding the student loans for kids.
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Joined: May 21st, 2006, 4:46 am

December 9th, 2011, 10:39 pm #7

This is where we find ourselves. I welcome your input/advice/experiences.

I start paying back student loans next month. At my current income, it will take all of my paycheck and possibly more to pay them. Bummer, but that's life in part time social work, I guess. I could consolidate the loans and possibly pay less per month, but then I'd just pay for longer, and I don't want to do that, either. I am hoping to pick up more hours at work, but that is uncertain. But that's not the real dilemma.

In October, I applied for and received PLUS loans to pay for Katie's college. She will pay us back, but because she is still a dependent, she was not eligible for private loans, and we make too much for more financial aid. She has chosen an expensive school. That's on her, but here's the problem: When I did, it must have knocked my credit score into the basement or something. I haven't done a credit report check yet (which company do I do that through?), but ALL of our credit cards jumped up in rate and all of them lowered the available balance to what we owed. No problem there because we weren't using them anymore anyway, but MAN! I've got a couple at 23.99% now that were like 7.9 before!

I considered a line of credit to pay off the debt at a lower interest rate, but I hate to do that because I obviously am not good about staying away from the ccs and am afraid I will "need" something and end up with the line of credit AND more cc debt.

Let me say that all of our payments everywhere are up to date and we are in the snowball process, etc. No one is knocking on our door, we are not getting threatening calls, etc. But we are at that point where we are feeling the weight of the debt, and not much is going toward principle in our payments with the interest rates up so high. We've never experienced this before, so we are wondering what the best step is. Just plug away at them old school style? I don't want to do a balance transfer--that's what two of these ccs were and now they are through the roof in interest. would have been better off to leave the balances on the old cards at this point! (although they may have jumped, too)

if we look into a heloc, will that alert our mortgage company to the higher interest rates and cause our mortgage rates to go up? (As in, do they do that, too, like the ccs did?) Everything I read says that we are eligible for a lower interest rate on our home which would save us about $300 a month in payments, but I'm afraid of refinancing if our credit score has taken such a hit.

What would you do?

Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
BA, I'm sorry this has happened to you. Your credit isn't bad--you're just using too much of it. This is what I would do:

(1) Go to www.annualcreditreport.com and pull your credit report for all 3 companies. Go over it with a fine tooth comb for any mistakes and correct them. If you find that you still have accounts open at companies with whom you haven't done business with in years--including companies that have gone out of business--call or write and close those accounts. This will reduce the amount of credit you are "using."

(2) While you are at the credit report site, spend the $7 or $8 it costs to get your credit score from ONE company. The score may differ between agencies, but you really only need a ballpark figure.

(3) Do what you can to lower interest rates. Obviously, ask all of the CC companies, and Paula's suggestion to try your credit union is also good.

(4) The others are right: stop borrowing for your kids. Of course, you may not have any choice in this--they might not loan to you.

(5) Put your kids on repayment plans. Whether they owe you $2 or $2,000, they need to pay you back--and not just because you need the money. They need to learn to pay their debts, too. Every dime goes to your debt snowball.

(6) Maybe this should be #1--since you've been through the Dave Ramsey program, GO BACK and take the FPU course again. This crisis might be enough to get your DH on the same page about debt.

(7) Do NOT refinance your house or get a heloc. YOU CAN'T BORROW YOUR WAY OUT OF DEBT.
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Joined: May 25th, 2006, 12:05 am

December 10th, 2011, 12:33 am #8

This is where we find ourselves. I welcome your input/advice/experiences.

I start paying back student loans next month. At my current income, it will take all of my paycheck and possibly more to pay them. Bummer, but that's life in part time social work, I guess. I could consolidate the loans and possibly pay less per month, but then I'd just pay for longer, and I don't want to do that, either. I am hoping to pick up more hours at work, but that is uncertain. But that's not the real dilemma.

In October, I applied for and received PLUS loans to pay for Katie's college. She will pay us back, but because she is still a dependent, she was not eligible for private loans, and we make too much for more financial aid. She has chosen an expensive school. That's on her, but here's the problem: When I did, it must have knocked my credit score into the basement or something. I haven't done a credit report check yet (which company do I do that through?), but ALL of our credit cards jumped up in rate and all of them lowered the available balance to what we owed. No problem there because we weren't using them anymore anyway, but MAN! I've got a couple at 23.99% now that were like 7.9 before!

I considered a line of credit to pay off the debt at a lower interest rate, but I hate to do that because I obviously am not good about staying away from the ccs and am afraid I will "need" something and end up with the line of credit AND more cc debt.

Let me say that all of our payments everywhere are up to date and we are in the snowball process, etc. No one is knocking on our door, we are not getting threatening calls, etc. But we are at that point where we are feeling the weight of the debt, and not much is going toward principle in our payments with the interest rates up so high. We've never experienced this before, so we are wondering what the best step is. Just plug away at them old school style? I don't want to do a balance transfer--that's what two of these ccs were and now they are through the roof in interest. would have been better off to leave the balances on the old cards at this point! (although they may have jumped, too)

if we look into a heloc, will that alert our mortgage company to the higher interest rates and cause our mortgage rates to go up? (As in, do they do that, too, like the ccs did?) Everything I read says that we are eligible for a lower interest rate on our home which would save us about $300 a month in payments, but I'm afraid of refinancing if our credit score has taken such a hit.

What would you do?

Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
I have heard (have not tried to verify it though) that student loan repayment time max is 10 years... so if you consolidate, which might lower the payment, and pay for 10 years, the rest is forgiven???

I also know that in some fields, the student loan may be forgiven, or a portion of it forgiven, ie. teaching in a low socio-economic area,... social work might be one of those opportunities?

IMO, a long chat with Katie is in order - it makes NO sense to take out a loan for a high dollar school and put the family financial security further at risk. In reality the diploma doesn't read "Katie took her first year of courses at Duke, but graduated from Indiana University", so why invest the $$$$

glendaMO
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Joined: May 25th, 2006, 10:01 pm

December 10th, 2011, 3:30 am #9

This is where we find ourselves. I welcome your input/advice/experiences.

I start paying back student loans next month. At my current income, it will take all of my paycheck and possibly more to pay them. Bummer, but that's life in part time social work, I guess. I could consolidate the loans and possibly pay less per month, but then I'd just pay for longer, and I don't want to do that, either. I am hoping to pick up more hours at work, but that is uncertain. But that's not the real dilemma.

In October, I applied for and received PLUS loans to pay for Katie's college. She will pay us back, but because she is still a dependent, she was not eligible for private loans, and we make too much for more financial aid. She has chosen an expensive school. That's on her, but here's the problem: When I did, it must have knocked my credit score into the basement or something. I haven't done a credit report check yet (which company do I do that through?), but ALL of our credit cards jumped up in rate and all of them lowered the available balance to what we owed. No problem there because we weren't using them anymore anyway, but MAN! I've got a couple at 23.99% now that were like 7.9 before!

I considered a line of credit to pay off the debt at a lower interest rate, but I hate to do that because I obviously am not good about staying away from the ccs and am afraid I will "need" something and end up with the line of credit AND more cc debt.

Let me say that all of our payments everywhere are up to date and we are in the snowball process, etc. No one is knocking on our door, we are not getting threatening calls, etc. But we are at that point where we are feeling the weight of the debt, and not much is going toward principle in our payments with the interest rates up so high. We've never experienced this before, so we are wondering what the best step is. Just plug away at them old school style? I don't want to do a balance transfer--that's what two of these ccs were and now they are through the roof in interest. would have been better off to leave the balances on the old cards at this point! (although they may have jumped, too)

if we look into a heloc, will that alert our mortgage company to the higher interest rates and cause our mortgage rates to go up? (As in, do they do that, too, like the ccs did?) Everything I read says that we are eligible for a lower interest rate on our home which would save us about $300 a month in payments, but I'm afraid of refinancing if our credit score has taken such a hit.

What would you do?

Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
That's all these are, but here ya go, anyway.... Katie is at a Christian university getting a fabulous Christian education that she feels led to get. Long story short, it will make a difference in the long run, and she is paying back all of it. And she's really, truly good for it, too. We had no intended to do PLUS loans, but she was already there (they let her in before it was all settled) and would not loan to her but would loan to me. So....that's Katie.

No, you can't consolidate and get debt forgiven. In certain cases, they will go 25 or even 30 years. I'm not interested in that, though. I want to get it paid back and pronto!

Spencer is paying all of the PLUS loans out for him, but obviously, they are still in my name. He has become very responsible and is paying all of the loan payments on his own.

No, social work does not fall into the student loan forgiveness categories. And I'm not in an area where I could do that anyway. If I had my teaching license and wanted to teach in an inner city school (I actually would LOVE to) for five years, my own loans would be forgiven after the five years, but as I said, I'm not near a school that qualifies. And I don't have my license. I would need a few more classes to do that. I love what I do, so I am hoping that I will be able to pick up some extra hours eventually and pay it back faster. If not, I may find myself doing some retail or fast food on weekends. I am not opposed to working to pay this all off! I had planned on it!

Christine, I think we may have been twins separated at birth.

Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
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Joined: June 5th, 2006, 5:33 pm

December 10th, 2011, 4:14 am #10

I called right away when I saw the interest rate had jumped. They told me that my credit score had changed, so they changed the %. It was not an option to have them lower it. I was ticked! I'm also worried that Katie will not be able to finish at this school. What if the dept of ed won't loan to us next year because of credit ratings? Very frustrating. Most of our debt is student loans--mine, son's PLUS and now Katie's PLUS. We also have cc debt, though, too--obviously.

We do have equity, but I'm not sure how much. The last time the house was appraised, it appraised for about $55,000 more than we currently owe, but that was before the market took such a hit, so not sure what the appraisal would be now.


Blessings,

Bethann
Matthew 6:33
http://gettingtheresimply.blogspot.com/

"Live in such a way that you would not be ashamed to sell your parrot to the town gossip." --Will Rogers
If so, he could take out a loan and pay off the PLUS you took out for him. In other words, move the debt into his name.

------
The road to success is always under construction.
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