Browsed by
Month: June 2016

Question about credit rating

Question about credit rating

My situation:

I have a lot of credit card debt, owe for a cell phone that is now shut off, and a dept store card.

I’m paying off the dept store card this month. My understanding is they will reinstate it. I want that just so I have some sort of credit to use around holidays. But I won’t get into debt with it.

I want to pay off the cell phone because I need a cell phone. But I’m not sure if they’ll give me another contract. Will they?

The credit cards are a lot – about $28,000. One of them will settle I only have to pay 20% of the balance. Very good deal.

That would leave me with $24,000 of debt, and those cards are charged off.

My big questions:

  1. can I save my dept store card and get a cell phone?
  2. is it worth settling the one card? i’d still have a lot of debt and lousy credit.

I guess I want to know if my credit rating gets a little better each time I settle an account instead of paying tiny amounts over years. Or, do settled accounts look bad and stay on your credit report for years?

A friend advised that I file for bankruptcy because it’s a faster way to better credit. Is that true?


I would really recommend you go to and get started on his baby step. The first step is to get current on all your past due bills and make a budget. Once that is done, then you focus on putting $500-$1000 in the bank for emergencies. You know it is an emergency when it is something you can’t anticipate like: car repairs or pet emergency or medical expenses. The reason you need this savings is so you won’t be tempted to charge on credit cards again and get bogged down in debt. Also you may get $500 payday loan very fast – but don’t use them too often.

You really need to find another way to pay for holiday gifts. The holiday comes the same time every year, so you have a whole year to plan. For example: if you spend $600 for Christmas, then take $20/week and put it in your savings account. That way you will have it all saved up and there will be no need to use your credit card! Won’t that be a good feeling to pay cash for the holidays!?

Once your cell phone is paid for, you should be able to get another one. If you can settle with the credit card companies, I would do that. They will “forgive” the rest of the debt. It will show on your account as a settled charge off. It is much better to have a “settled” charge off than just a charge off. Your credit rating will improve and you will be debt free that much faster!

You don’t say what your income is or other expenses like car payments or rent. This will make a lot of difference in how fast you pay off your debt and get on the road to financial freedom. Wouldn’t it be great to have hundreds of thousands of dollars in the bank instead of having credit card debt?! If you want to be debt free and have that money for yourself instead of sending to your creditors every month, you have to get intense about paying it off.

Good luck and keep us posted!

If I can help establish his credit

If I can help establish his credit

Well, I figured that if I can help establish his credit, he’ll be less likely to open a bunch of accounts just to get a credit history. This would have to go along with us teaching him financial responsibility. I’ve learned a lot of things in the last several years and am working on getting out of debt. Let’s face it, he’ll need credit to rent a car, hotel room, apartment or buy a house.

Also, now insurance companies and employers are looking at credit reports to see how stable you are. An employer will look more favorably to someone with good credit than with no credit history or credit score. My mom never taught me financial responsibility Being a single mom, she barely made enough to support us 3 kids. My dad gave her minimal child support. She is still not good with her money.

That being said, I went crazy my first year of college and ended up filing BK when I was 22 years old. That was 16 years ago and even though I have debt now, I am more responsible with it, have no problem paying the bills and slowly getting out of debt We just bought a house, so it set me back a little. So, if my son can learn good financial habits, have the credit history to get him through college, I am hoping he won’t find the need to get a bunch of credit cards.

Like I said, it could backfire and bite me in the butt, but I am following the advice of a financial guru (Suze Orman) who says it is a good idea to do this for your children. Dave Ramsey says no credit ever, but not everyone has thousands of dollars sitting in the bank at age 18 either.

I have lived without a credit card for many years. If I do get one someday it will be with USAA. They answer to their members, not shareholders like these other financial instituions do.

Makes a big difference!

Unfortunately, not everyone is eligible for membership with USAA. You can find out if you are eligible though by going to USAA’s website.
It’s almost entirely for military and family , but I know someone who works for the FBI who is a member and has no connection with the military. I know others who are members because a parent remarried someone in the military. It could pay to find out if you are eligible for membership. Their service and prices are second to none .

On a differnt note, the book MAXED OUT is on sale now. I got my copy yesterday and have read about half. It’s an intersting, informative book.
I also have Suze Ormans new book about women and money. Anyone read it? I’m going to finish Maxed Out first and then read Suze O.