Seeking "sound" advice on how to recoup from major credit mistakes

Long story short..Former SAHM recently returned to workforce, but not before my husband and I ran into some really hard financial set backs. Our credit has been greatly affected. What should I do to rebuild and re-establish my credit. Please, no quick fixes, no schemes. ONLY TRIED SOUND ADVICE!

Check out any book by Dave Ramsey

Hubby and I did this just before he got out of the military. We were applying for a home loan and we wanted to get the best rate possible.

First, pull your credit report from all three credit reporting agencies. Then go through and find out who you owe, and how much you owe. Start off paying the smallest bills. Once you do that, your credit score will automatically start going up. If you have credit cards, stop using them and start paying them off. Do not pay only the minimum. Even if you can pay only $10 more, you'll pay them down faster.

One other thing, worry about everything but utility and medical bills first. Once you've paid those all off, then pay off utility bills, then medical bills. This will increase your credit rate quicker as utility bills and medical bills weigh less on your credit rating (assuming an actual person is evaluating your credit report for credit worthiness.)

Good luck!

I second the Dave Ramsey advice. My husband and I bought the book, "The Total Money Makeover" and it has absolutely revolutionized our life and finances. We have now gotten all credit debt paid including cars and are working on paying off our house in only 2 1/2 years of marriage. It is not a get rich quick scheme it is like Weight Watchers for debt, and it really works. There are seven baby steps outlined in the book and you just focus on the step you are on so it really helps you not feel totally overwhelmed. It teaches you a new approach to money and how to live debt free and stay debt free. The average couple that works the system can expect to be totally debt free including the house in about 7 years. That number can vary a couple years either way depeding on your financial condition when you start, but we are trying really hard to hit that 7 year mark and are blown away by what we have accomplished the last 2 years. If you would like you can also catch Dave's radio show on 950 AM, I think it comes on at noon, or check out his website at daveramsey.com. I really encourage you to take a look at his approach, learning how to get free from the strangle hold of consumer debt is so life changing! I know I am going on and on but I am just so passionate about this because I know what it feels like to be burdened by tons of debt. Best wishes and hang in there!!

Yes, 3rd vote for on the Dave Ramsey books or DaveRamsey.com to find a trained counselor in your area who can help. No schemes with Dave---it's all common sense, but it's the things we forget when we are stressed.

You can probably find him on a local radio station---it's 550 AM in San Antonio, or can play back the days show from the internet.

Once your household situation is on the upswing, you can get books or programs for your kids so that they don't repeat those mistakes in their futures.

You need to speak with CCCS. This is a FREE organization that has helped millions of Americans work out of their debt with counseling and cooperation of your credit card companies. http://www.consolidatedcredit.org/

Notice they ARE a .org... There is no fee for them to help you, but they will make arrangements with the credit card companies to sometimes lower your payments and lower the interest rates, sometimes, the credit companies will even get rid of the interest just to get the payment. You will be asked to cut up all of your credit cards and you will not be able to apply for new ones until you pay off your debts. They will also help you make out a budget and help you learn to better manage your finances. All of this is free. This is not a scam. You will both be asked to attend counseling classes on how to budget, how to save money and how to make the payments to pay off all of your debt.

You can do this. It is not too late. It will also help lessen much of the stress you are feeling right now.

Dave Ramsey, Dave Ramsey, Dave Ramsey! It won't be easy, but his program is common sense and it works. My husband and I took his Financial Peace University almost a year ago at our church. We didn't even have any debt, but needed to get grounded about our spending and saving habits. We now have a budget that we live by and know what we are going to spend our money on before the month begins. If we don't have it, we don't spend it. This will definitely help you fix your mistakes and learn how to avoid making future ones. Take the Financial Peace University if you can. Many churches offer it. I highly recommend it. It may sound expensive (I think we paid around $120 for materials, etc.), but some churches have scholarships if you can't afford to do it and I will guarantee that it is worth every penny. You will get that back ten fold if you take this program seriously and work it. Good luck to you and I'm sorry for the situation that you're in. It will get better!

pick one bill at a time and pay it completely off, make minimal payments on all others. Once it is paid off, move on to the next. Start with the smaller bills so that when you get to the bigger bills it doesn't take too long because you will have more money to put towards them will the littler bills out of the way.

Good luck and godspeed... ;-)

I have to give all these ladie kudo's. Dave Ramsey is awesome! His advice is wonderful and practical. I would steer away from the places like Consumer Credit Counseling Services because you pay more to them each month than you do to the actual place that you owe. We were gonna try that one time until they told us our payment would be $150/mo and that only $75 of that was going to be spread out to the 12 creditors that we had breathing down our necks. the rest went into the pocket of the "non-profit" organization. That was too nuts for us! I think you just have to set a budget and start slowly but surly digging yourself out of the hole. Good luck and God Bless!!

deborah
http://www.formyrugrats.com

Again kudos on Dave Ramsey! Also Crown Financial workshops of bible studies at church is a fabulous way to see money as GOD intended we do!

Also, not a fan of the credit card shuffle,... but if you have a Discover card, you might consider calling them and asking to upgrade your account. That you want a new card (check out their options online) and they will likely issue a brand new card (Account) with likely an offer of ZERO per cent interest for BALANCE TRANSFER for up to one year for a slight fee (Max of $75.00 is their traditional cost). Other credit cards charge 3% of the balance transfer, which can really add up. ONLY Transfer what you can make payments on! If you have 2k due on another credit card (at a higher interest rate) and transfer the balance you can make approx $190.00 per month payments at 0% ... you will have that amount paid off in 11 months! DON'T transfer more than you can pay off in the year, and don't pay late, and be SURE to have it paid in full BEFORE the invoice of the 12th month.
Msg me if you have questions. It is not get rich quick, but a useful tool.......

Morning Sherry;

There are NO Quick Fixes!!! It takes time to dig one self out of a financial hole! I know that's not what you wanted to hear!
You and your husband have to sit down and establish a budget! Yeah, I know, nasty word! But, it is the only way to get started! Each of you have to agree on every single penny and where it is going!
Here is a simple budget:

1 Food (a) under this remember to include both your lunches and the kids lunches when they are at school or Baby sitter

2 Rent

3 Utilities (Electricity, Water, telephone, cell phones)

Now we're down to paying debts!
Compile a list of each debt, all credit cards and their
totals, what day they are due and what is the min payment.
Now list them in order of amount owed, putting the smallest
amount on the top!
Here is where you will start to dwindle the debt, you want
to pay off that smallest one first, so if possible instead of paying the min on this one, you want to put extra into it's payment! As soon as this one is paid off you move on to the next smallest.
It may take you 3 to 5 years to get out of debt, since you didn't say how much you are in the hole or your salaries I can't tell you much more!
Sticking to a budget is hard>>>but, never having any money is worse! Think about it like this: You have been blessed with two great children, a working husband and a decent job yourself! So gee wiz, what's so hard about going on a budget and working yourselves out of the hole you dug! It's a ladder and it takes one step at a time!
By the way, by starting to make all payments on time, your credit will actually correct it's self if three years!
Good Luck;
Bill C.

Sherry, my husband and I are going to get started with Credit Solutions.. They are like a credit consolidator, but seem to have a better reputation. The local Dallas NBC station did a short news clip suggesting to use them to consolidate debt. However, if you google it, all you will read is negative comments.. We are in such high debt right now, there is nothing else we can do.. Check them out... good luck.. J

I was going to say what Bill C said. Especially about paying everything on time and focusing any extra on the smallest balance. Among other things, it helps keep you motivated to actually get to pay stuff off!

Good luck!

I would also suggest Dave Ramsey's materials. He has a website called daveramsey.com where you can find out about his Financial Peace University Classes in your area. It's also worth listening to his radio shows so you get an idea of how he operates. I took his classes and followed his advice when I was going through a divorce nearly four years ago. I was able to pay off my five-year loan in one year, getting myself completely out of debt except for my mortgage. And even that should be finished several years early.

Another site I've come to enjoy is called thesimpledollar.com. Lots of interesting financial info from a young man who nearly lost everything and made a complete turnaround in his life.

Slow and steady wins the race. It looks like you 'know' what to do with out knowing you do. : ) There is a great guy who does a money show in Houston on AM radio and he's fab, I would listen to him or grab one of his books and go from there. Dave Ramsey I think. Without reading a book the plan is this: make a budget, trim excess, pay off debt, live free!

Good luck!

Hi Sherry,
Are you familiar with Dave Ramsey and Financial Peace University? If not you should check him out...his is a practical, common sense approach that teaches how to get out of debt and stay out of debt. But there is so much more that you learn through the course...and it's "sound" advice. My husband and I are currently facilitating an FPU class, we both feel very strongly about how it's changed our lives and want to help others experience financial peace too!

www.daveramsey.com

Hope this helps!
Leah

Dave Ramsey's Financial Peace University is great. You could read his book, The Total Money Makeover, until you're able to get into a class.

Sherry -
You made the first step, admitting.
Second, pay cash from here forward..and leave only 1 credit card open for usage....if you can't pay cash, you do not need! Third, call credit card companies and ask for lower rate..or go online and shop card rates and TRANSFER balances..this will help on min. payment amounts.
Just a few helpful hints to get you going!

I am in the mortgage business and the WORST advice is to be a part of CCCS. I know they come in on a white horse to save the day, but if you can handle the debt on your own...do it. Last resort, CCCS. CCCS really hurts your credit! Best of luck and and now you have TWO jobs...yipee! LOL!

Another "Dave Ramsey" answer (I think he will be here in San Antonio live this weekend?)

get a copy of your credit report from all three companies. See what information is on them. Some times if you have you name listed differently(like Joan B. Doe, Joan Bertha Doe and Joan Doe) they can actually mark it against you. If you see something like that right to the companies and tell them that it is a mistake. Dispute as much of that info as you can. If you are listed as having too many addresses,or too many names, they can count it against you.
Also, take any extra income you have and pay down your cards. You can cut expenses like cable, dining out, and stuff like that. Use that money to pay off your cards as soon as you can.
I know that it seems like a big black hole but you can get out of it.
Good Luck
Kristin