Improving poor credit

Discussion in 'Teacher Time Out' started by shoreline02, Jul 12, 2017.

  1. shoreline02

    shoreline02 Cohort

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    Jul 12, 2017

    I'm trying to improve my credit score. I made a lot of mistakes when I was in college. I applied for a bunch of credit cards, didn't pay some of them back , late all the time, a bunch of them became closed, and just made a mess of everything.

    Now, 5 or so years later ..... I worked my butt off to get them all paid off except for two Chase accounts - they were closed back in 2010 and the balance was never paid off but the company marked it as "Charged off as bad debt. Canceled by credit granter."

    According to TransUnion no balance shows up for either of them but according to Equifax I still owe about $1200 for each of them.

    What would be the best thing to do? Pay them? Wait for them to fall off my account? I'm not even sure when the 7 years would start since I don't know when they first became delinquent.
     
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  3. Caesar753

    Caesar753 Multitudinous

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    Jul 12, 2017

    I would recommend sitting down with a financial adviser (advisor?). They know all the ins and outs about credit reporting. Sometimes paying off an old debt can actually hurt your credit because it shows as current activity on your credit report once you make a payment.

    I also made some bad choices with credit in college because I didn't know any better. When we decided to buy a house, we worked with a mortgage broker who helped us fix our credit. Since that time we've bought two houses and a car, and my credit is incredible. We normally spend "real money" (cash/debit card) for everything, including our cars. We have a credit card with a fairly high limit, and we put a few big things on that (vacations, furniture, whatever) each year to keep it active. We make sure to pay it off within a month or two, and that seems to have made all the difference in improving our credit.
     
  4. shoreline02

    shoreline02 Cohort

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    Jul 13, 2017

    How do I find a reputable financial advisor?
     
  5. Caesar753

    Caesar753 Multitudinous

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    Jul 13, 2017

    Are you a member of a credit union? Start there. If not, talk to people who already have their hands somewhere on your money--the group that handles your 403b or stocks or state retirement account or whatever. If they don't advise people with poor credit, they can almost surely refer you to someone who can.
     
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  6. bella84

    bella84 Aficionado

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    Jul 13, 2017

    Search here: https://www.napfa.org/

    When I lived in another state, I once had a Lyft driver who worked as a financial advisor. I told him that I'd be moving soon and wanted to look for a local financial advisor once I was settled in. He told me about this association (NAPFA) and recommended that I look for an advisor through their website. He explained to me that it is better to have an advisor who charges a fee rather than one who earns commission, because the ones who earn the fees get their money from you either way. The ones who work on commission have the incentive to sell you products or services that you don't need. They aren't necessarily looking our for your best interests but their own, instead. I found someone local to me through the website and was very pleased with the work he did for me. He charged me $600 for a single project (rather than ongoing advising, which I cannot afford). I learned a lot about the financial lifecycle, budgeting, and rolling over retirement funds from him, and he gave me recommendations on what to do with my money - all things that would not earn him another dime, just things that he believed would be good for me.
     
  7. MetalTeacher

    MetalTeacher Companion

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    Jul 24, 2017

    I would definitely check with an advisor before you make any payments. Making a payment often locks you back into regular payments, in the amounts and schedule that THEY specify. Talking to an adviser first gets you a better idea of your options before you lock yourself into something.
     
  8. AlwaysAttend

    AlwaysAttend Fanatic

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    Aug 1, 2017

    Make sure you research whatever financial advisor you choose and make sure he is a member of professional orgs and in good standing with the state. Don't get scammed. If anything sounds too good to be true, it is.
     

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