How would you go about repairing your credit?

[I.Dup.]

Any tips?

 

We have a foreclosure 7 years ago that is preventing us from being able to buy a house.

 

We also have a lot (10 or so?) of late/default payments on random things, most under $300. One more thing- dh agreed to be a co-signor for his brother's student loan. Of course his brother defaulted and that is now on our credit as well, I think it's around $5,000.

 

We have never used credit cards.

 

So basically, everything on our credit report is negative. WWYD? Would you try to repair it so you could eventually buy a house, or just keep renting? We are torn on the urgency to buy a house, although I think paying off a house by the time we retire would be really nice.

[TranquilMind]

Any tips?

 

We have a foreclosure 7 years ago that is preventing us from being able to buy a house.

 

We also have a lot (10 or so?) of late/default payments on random things, most under $300. One more thing- dh agreed to be a co-signor for his brother's student loan. Of course his brother defaulted and that is now on our credit as well, I think it's around $5,000.

 

We have never used credit cards.

 

So basically, everything on our credit report is negative. WWYD? Would you try to repair it so you could eventually buy a house, or just keep renting? We are torn on the urgency to buy a house, although I think paying off a house by the time we retire would be really nice.

 

 

Yes, repair it. Pay off those small things, one by one, before they mushroom into larger things.

 

Your credit report factors into every single thing you do. Employers now run credit reports, because poor credit might make the employee a risk. Insurers run credit reports and if you have poor credit, you pay higher rates for every kind of insurance today.

 

Here's an example. I have a 35 year history of perfect credit. This allowed me to negotiate with the CEO of Chase directly, and get my credit card interest rate lowered back to 4%, a few years ago when they were bumping up everyone's rates due to the bad economy. I carried no balance, and only kept the card, which I had had since the 70's, as a way of keeping my credit score high,because remember, high available credit ratio to debt + perfect payment = best financial deals. The guy and I interacted directly, which surprised me, and my argument that he wanted to keep a 30 year customer with my repayment record won the day.

 

Our car insurance for two adults for multiple vehicles is about $900 a year. We pay lower rates than most people, again because of longevity and perfect payment record.

 

It's really worth it, financially.

[Guest inoubliable]

creditboards.com

 

That place got us into a place where we can qualify for a mortgage with just a year of serious letter writing, disputing, paying, etc. The people there are incredibly helpful and don't condone any skeevy tactics.

[I.Dup.]

will spending thousands of dollars to pay off random old bills really repair our credit though? We were told by someone a few years ago that part of the problem was that we had nothing "good" on our credit (as in, credit cards I guess)

[Paintedlady]

I think you're asking the wrong question. Instead of asking whether paying off thousands of dollars worth of bills will repair your credit, you should be asking yourself why you don't think you should pay off money you borrowed and promised to pay back unless there's some bigger payoff in it for you.

[Acorn]

I think you need to pay off the debt, and open credit lines to establish the credit ratio but only if you will have perfect payment history.

[I.Dup.]

I think you're asking the wrong question. Instead of asking whether paying off thousands of dollars worth of bills will repair your credit, you should be asking yourself why you don't think you should pay off money you borrowed and promised to pay back unless there's some bigger payoff in it for you.

 

 

Thanks for the obvious. I think over 10 years having around 10 late/defaulted payments under $300 (maybe totaling $1,000-$2,000?) doesn't quite make us scam artists. 2 are medical charges for missed visits ($200), things like that.

[poiema]

Pay off the bills.

Get a credit card that you will pay off every month. I don't recommend charging everything, but even if all you do is charge your phone bill or something (and pay it immediately off), that will help you rebuild your credit.

[Guest inoubliable]

will spending thousands of dollars to pay off random old bills really repair our credit though? We were told by someone a few years ago that part of the problem was that we had nothing "good" on our credit (as in, credit cards I guess)

 

 

Credit repair has two parts. Paying down debt and eliminating errors and black marks, is one. The other part is building up GOOD credit. Having a credit card isn't bad, if you're using it the right way. Really. Last year, we didn't have any credit cards, either. Hadn't for years. It was the opening of four different cards between us, and using them wisely for almost a year, that did most of the upward movement on our credit scores. Capital One is easy to qualify for their rewards card. That's where we went first. They also have a deposit card, too.

[Twigs]

I'm no credit expert, but this is what I would do.

 

I would get advice from a reputable credit counselor(not credit consolidation). I would look only at non-profits.

 

I would pay off what is currently owed.

 

I might look into getting a secured credit card, use it to make small purchases every month and pay if off completely every month.

 

If I were offered a 0% "loan" (such as for medical services), I would take it and be sure to pay the required amount every month.

 

With the last 2, I whould have to be very sure I could make the payment every month without fail. That means setting aside enough money every paycheck that is used for nothing else.

 

I only put in 2 links, so be sure to do more research.

 

Best Wishes

[Guest inoubliable]

Thanks for the obvious. I think over 10 years having around 10 late/defaulted payments under $300 (maybe totaling $1,000-$2,000?) doesn't quite make us scam artists. 2 are medical charges for missed visits ($200), things like that.

 

That website - there is a forum for medical accounts. Trust me when I say that there is a member there who has a tried-and-true approach to dealing with medical issues on credit reports. You can PM me here, or on there if you need some guidance. I'm inoubliable on there still. LOL. It probably doesn't matter now if I go back to my original name here.

[TranquilMind]

will spending thousands of dollars to pay off random old bills really repair our credit though? We were told by someone a few years ago that part of the problem was that we had nothing "good" on our credit (as in, credit cards I guess)

 

Yes. Delinquencies hurt you quite a bit, even if there are good things on your credit report. Exception: medical bills after catastrophic event.

[Twigs]

 

… there is a member there who has a tried-and-true approach to dealing with medical issues on credit reports. …

 

Could you post a link for this? Or key words for better searching?

 

I looked at that forum and got overwhelmed.

 

Thanks!

[TranquilMind]

Thanks for the obvious. I think over 10 years having around 10 late/defaulted payments under $300 (maybe totaling $1,000-$2,000?) doesn't quite make us scam artists. 2 are medical charges for missed visits ($200), things like that.

 

Then pay them off, and make sure you get releases. If it happened a couple of times, that is understandable, but 10 times does not look good to the credit reviewer -and everyone is looking at your credit these days.

[I.Dup.]

Then pay them off, and make sure you get releases. If it happened a couple of times, that is understandable, but 10 times does not look good to the credit reviewer -and everyone is looking at your credit these days.

 

What are releases and how do I get them?

 

I hate that I have to take care of everything financial. It freaking stresses me out.

[TranquilMind]

 

What are releases and how do I get them?

 

I hate that I have to take care of everything financial. It freaking stresses me out.

 

Once you've paid each item off, you should receive a document in the mail (email?) indicating that this was paid off. You must have them report to the credit bureau that you have paid the item off, and if they refuse or fail to do so, you have the documents to prove you did. You must get all this removed from your credit report.

[Guest inoubliable]

 

Could you post a link for this? Or key words for better searching?

 

I looked at that forum and got overwhelmed.

 

Thanks!

 

Sure. It's a LOT of information over there. It took me a few years of lurking and getting my stuff in order before I got busy last January with actually requesting reports on a consistent basis, writing the letters, keeping track of dates, paying for credit monitoring...

 

http://creditboards.com/forums/index.php?showforum=39

This is the subform. WHYCHAT is the guy's name. He has a way of using HIPAA.

His own site is here: http://whychat.5u.com/

 

I can absolutely vouch for his methods. Not only that, I personally know several other people who were helped using his methods.

[misty.warden]

Thanks for the obvious. I think over 10 years having around 10 late/defaulted payments under $300 (maybe totaling $1,000-$2,000?) doesn't quite make us scam artists. 2 are medical charges for missed visits ($200), things like that.

 

It doesn't make you a scam artist, but it looks like you can't be arsed to pay small bills so why would they want to trust you with larger ones, KWIM? Banks are in it to make money too and won't extend "good credit" opportunities to people they see have a history of not using it wisely. (Sorry to be harsh, I'm in that boat with you so please don't think I'm looking down my nose at you.)

[I.Dup.]

It doesn't make you a scam artist, but it looks like you can't be arsed to pay small bills so why would they want to trust you with larger ones, KWIM? Banks are in it to make money too and won't extend "good credit" opportunities to people they see have a history of not using it wisely. (Sorry to be harsh, I'm in that boat with you so please don't think I'm looking down my nose at you.)

 

 

I totally understand having bad credit is negative, that's why I'm asking what is the best way to repair it. I wasn't sure if old, missed medical visits ($100 for a missed visit? Please.) that have defaulted or a CD sent mistakenly through the mail 11 years ago before I forgot to call and cancel some stupid TIME membership that hooks you into monthly CDs should still be paid off, kwim?

 

I totally get that it looks bad on us to have bad credit. I totally get that.

 

Also, I'm assuming we shouldn't start paying off my loser BIL's $5,000+ student loan? I already sent in a dispute letter, which was denied.

[Paintedlady]

Thanks for the obvious. I think over 10 years having around 10 late/defaulted payments under $300 (maybe totaling $1,000-$2,000?) doesn't quite make us scam artists. 2 are medical charges for missed visits ($200), things like that.

 

 

I didn't say you were a scam artist, but you've got a defaulted mortgage, approx. 10 late or defaulted payments on other things, plus you're on the hook for a loan that you co-signed for. My point is that you've got a lot of work to do before you should be worrying about your credit score. You need to pay back what you've borrowed, whether or not it helps your credit score. After you've done that and you've proven to yourselves that you can safely manage money, THEN you should worry about upping your credit score and/or buying a house.

 

And before you think I'm just being a big meanie, let me assure you, I once owed over a $100,000 in various debts, plus my house. We worked hard for over 7 years to climb out the debt that we put ourselves in. Not so we could have a good credit score, but because we realized how irresponsible we had been and we didn't want to live that way any more. Today we have zero debt, except for our house.

 

My advice is forget the credit score and just work on getting out of debt. You're putting the cart before the horse, IMO.

[Twigs]

 

Sure. It's a LOT of information over there. It took me a few years of lurking and getting my stuff in order before I got busy last January with actually requesting reports on a consistent basis, writing the letters, keeping track of dates, paying for credit monitoring...

 

http://creditboards....hp?showforum=39

This is the subform. WHYCHAT is the guy's name. He has a way of using HIPAA.

His own site is here: http://whychat.5u.com/

 

I can absolutely vouch for his methods. Not only that, I personally know several other people who were helped using his methods.

 

 

Thank You!

[Rebecca]

So- your brother's loan is on your credit- and neither of you are paying on it?

Unfortunately, if you agreed to cosign, you are responsible for it. :(

 

To begin to build good credit, I would open a credit card and use it responsibly- paying it off each month. This will build good credit. There is nothing good on your report- only the bad.

 

I do not have any clue how long it takes for a foreclosure to work its way off of your credit score. Maybe someone else does???

 

With the late payments- did you pay them or did you just default? There is a difference...

paying things late does not always tank your credit. If they are medical related, you can/could have worked out payment plans to pay a little each month til they were paid off- even for a 100 or 200 dollar bill. This should not negatively impact your credit.

 

HTH,

Rebecca

[I.Dup.]

I didn't say you were a scam artist, but you've got a defaulted mortgage, approx. 10 late or defaulted payments on other things, plus you're on the hook for a loan that you co-signed for. My point is that you've got a lot of work to do before you should be worrying about your credit score. You need to pay back what you've borrowed, whether or not it helps your credit score. After you've done that and you've proven to yourselves that you can safely manage money, THEN you should worry about upping your credit score and/or buying a house.

 

And before you think I'm just being a big meanie, let me assure you, I once owed over a $100,000 in various debts, plus my house. We worked hard for over 7 years to climb out the debt that we put ourselves in. Not so we could have a good credit score, but because we realized how irresponsible we had been and we didn't want to live that way any more. Today we have zero debt, except for our house.

 

My advice is forget the credit score and just work on getting out of debt. You're putting the cart before the horse, IMO.

 

 

That's great, congratulations!

 

But are you saying we should go back and pay $120,000 on a house that someone else bought and is living in now? And that we should actually go ahead and pay off my BIL's student loan? Do people actually do that? Pay for houses they foreclosed on and someone else's student loan?

 

I totally get they were bad decisions at the time. Believe me, there have been many sleepless nights. Live and learn.

[Paintedlady]

 

That's great, congratulations!

 

But are you saying we should go back and pay $120,000 on a house that someone else bought and is living in now? And that we should actually go ahead and pay off my BIL's student loan? Do people actually do that? Pay for houses they foreclosed on and someone else's student loan?

 

I totally get they were bad decisions at the time. Believe me, there have been many sleepless nights. Live and learn.

 

 

Well it seems it's too late for the house of course, but if you've legally co-signed on your BIL's loan, you'll have to pay it or it will reflect badly on your already shakey credit. I'm sorry.

[regentrude]

But are you saying we should go back and pay $120,000 on a house that someone else bought and is living in now? And that we should actually go ahead and pay off my BIL's student loan? Do people actually do that? Pay for houses they foreclosed on and someone else's student loan?

 

 

Not the house - obviously that ship has sailed.

But if you are a co-signer, it is not "somebody else's" loan - it is your loan as soon as you put the signature on the paper, and you are on the hook. So if BIL does not pay, you have agreed to pay, and you will have to do that in order to improve your credit (unless you can make BIL pay). And yes, people actually do pay for student loans they have signed for.

[Jean in Newcastle]

If you co-sign a loan you are promising to pay it if they default. So yes, you should pay what is now your loan.

[Rebecca]

:( I don't think you have to pay on the house- but I am admittedly unknowledgeable in that area. I assume the bank "took it back." ??

 

but I do think you have to pay on the loan unless you can have it legally "forgiven"...

that is what cosigning is- and even if you were ignorant of it- that does not make it okay not to pay it. I am sure you learned to read the fine print. :( I am sorry.

[aggieamy]

So- your brother's loan is on your credit- and neither of you are paying on it?

Unfortunately, if you agreed to cosign, you are responsible for it. :(

 

 

 

But are you saying we should go back and pay $120,000 on a house that someone else bought and is living in now? And that we should actually go ahead and pay off my BIL's student loan? Do people actually do that? Pay for houses they foreclosed on and someone else's student loan?

 

 

I've snipped both these comments a bit but yes. I bought my sister a car when I was 25 and paying on my own car because I cosigned for her. I was legally obligated to pay for that car and I did. I duitifully paid every payment for a car I never sat behind the wheel of. It sucked. Then I found Dave Ramsey and have made better decisions since then.

[Jean in Newcastle]

The house was given up in exchange for the money you owed on it - that's what it means for the bank to foreclose on it You no longer have to pay that back.

[I.Dup.]

It wasn't my decision to cosign and cost us a lot of marital harmony at the time, and since, as you can imagine. I am hoping only dh's name is on there, I will have to check again. We just found out about 1.5 years ago that it's on there and is defaulted. We've been hoping ever since that he will actually pay on it, or that the 7 years will just be up (not sure how close we are to that).

[mytwomonkeys]

yes, pay back the balances of anything you owe on your credit report. also, pay your utilities on time every single time. they can go toward credit as well. i personally would never recommend opening a credit card. that can be a dangerous slippery slope. i'm a bit dave ramsey in that regard though, so take my advice with that in mind. imo, the best way to repair your credit is pay off those balances and pay any bills you have on time.

[misty.warden]

Not the house - obviously that ship has sailed.

But if you are a co-signer, it is not "somebody else's" loan - it is your loan as soon as you put the signature on the paper, and you are on the hook. So if BIL does not pay, you have agreed to pay, and you will have to do that in order to improve your credit (unless you can make BIL pay). And yes, people actually do pay for student loans they have signed for.

 

 

Co-signing makes the loan shared, so what regentrude said is right. As far as CD's and TIME magazine, if you've disputed those and it's been denied there's not much you can do besides take care of it. Saying it was a mistake or you forgot to cancel a subscription is understandable, but it won't make it disappear and it will keep hurting your credit if you ignore it. Even if it's not "the norm" I don't think that the fact that other people may not pay off their bills or loans is an excuse to refuse payment on commitments you made.

 

Foreclosures are another thing entirely, does the bank expect you to keep paying on it or does it just sit there like a bankruptcy?

 

I'm sorry if you wanted this to be a JAWM and it's not going the way you hoped. Getting out of debt sucks, but people make it work, usually by not opining that "no one else pays off old bills".

[mytwomonkeys]

It wasn't my decision to cosign and cost us a lot of marital harmony at the time, and since, as you can imagine. I am hoping only dh's name is on there, I will have to check again. We just found out about 1.5 years ago that it's on there and is defaulted. We've been hoping ever since that he will actually pay on it, or that the 7 years will just be up (not sure how close we are to that).

 

 

:grouphug: that stinks. i would have your husband talk to his brother. explain to him how this is affecting you & see if they can work something out.

[I.Dup.]

yes, pay back the balances of anything you owe on your credit report. also, pay your utilities on time every single time. they can go toward credit as well. i personally would never recommend opening a credit card. that can be a dangerous slippery slope. i'm a bit dave ramsey in that regard though, so take my advice with that in mind. imo, the best way to repair your credit is pay off those balances and pay any bills you have on time.

 

 

 

I went through FPU and had conflicting experience with Dave Ramsey's opinion on this. I remember from that that we should dispute charges but not be expected to pay off old charges on our credit report as part of our debt snowball. In fact, I got the impression that we shouldn't worry too much about our credit report much at all since we should be working to pay for everything in cash. But I could be way off, it's been a few years and I am clearly clueless on financial matters.

[Alessandra]

Creditors want to see a positive history of payments. A credit card that you pay will help, a debit card or a secured credit card (secured by your money in the credit issuer's bank) will not.

 

If you can't get a major credit card, start with a department store one, like Target or a gasoline one. Generally, cards that apply to a particular store or business are easier to get than a regular card that can be used in lots of places. You can start with a small limit and ask for it to be increased as you begin to get a regular credit history. Put everything you can on the credit card -- food, paper towels, etc and pay off in full each month.

 

Creditors don't like to see too many cards, even if the limits are small, so choose wisely. And keep your cards active -- don't cancel cards or switch if possible, as creditors like a long history with one company.

 

Creditors look at your ratio of debt to credit, so you want to keep the debt percentage small. If you card has a very small limit, consider paying off some of the charges in the middle of your billing cycle, if there is a convenient way to do this, like a phone payment.

 

If you need to buy a car and can get a loan, that is a great way to establish solid credit. Car dealers want to sell you the car and remove obstacles to your buying it. And they know they can come after you and repossess! The same thing would apply to a house, as it is also a secured loan -- and rates are so low now. If you found something you could really afford -- meaning afford even if your financial situation got worse, maybe something much more modest than what you have dreamt of.

 

Watch out for unexpected 'holds' on your card. For example, when staying in a hotel or renting a car, companies can put a hold on your card for potential damage, etc. The hold may not come off for several weeks after you have left the hotel, returned the car, etc. If you charge something during that period, you might be denied or go over your limit and incur extra charges.

 

That's all I can think of right now, off the top of my head.

 

Good luck!

 

One more thing -- ask questions before you apply, even if you have to go somewhere in person. You want to make fairly sure that you will be able to get the card you are apply for, because, when you apply, the company will make a credit enquiry about you, and too many enquiries is taken as a bad sign.

 

One more thing -- a just so you know. I do not subscribe to the Dave Ramsay philosophy. This is a credit based society. Use credit wisely and it will help you. Enough said -- it's my opinion FWIW.

 

One other more thing -- can you get credit in your name, or your dh in his. NOT trying to divide you, but it might be worth looking to see if one of you has better credit -- thinking about your dh's co-signing and wondering if the debt is yours too. That would depend on a lot of things, including what state you live in.

[misty.warden]

 

 

I went through FPU and had conflicting experience with Dave Ramsey's opinion on this. I remember from that that we should dispute charges but not be expected to pay off old charges on our credit report as part of our debt snowball. In fact, I got the impression that we shouldn't worry too much about our credit report much at all since we should be working to pay for everything in cash. But I could be way off, it's been a few years and I am clearly clueless on financial matters.

 

 

If you can find utilities, apartments, cars, etc that will accept all cash payments and you have all of that on hand, I'd say go for it. If I had that much cash on hand I'd pay off the old debts so that I could get credit if I needed it though.

[DianeW88]

They will come after you if you don't repay the loan as a co-signer. That's what co-signing is. When you did that, you basically said, "If BIL defaults on this, we agree to pay you every last penny." The courts will hold you to that. It's a legal document. Go back and pay everything you owe on every debt you owe (except for the foreclosure...unless the bank decides to come after you for it...some will, even after time has passed), then send the letters and make the phone calls to the credit bureaus to ask them to remove the debt from your report. Even if they won't, you can still dispute it and have it included with your file. A foreclosure will stay on your consumer report for 7 years after the date of filing. But unless your record is clean, you won't qualify for any loans with a decent interest rate. Clean up your bad credit and then worry about building good credit.

[4everHis]

It wasn't my decision to cosign and cost us a lot of marital harmony at the time, and since, as you can imagine. I am hoping only dh's name is on there, I will have to check again. We just found out about 1.5 years ago that it's on there and is defaulted. We've been hoping ever since that he will actually pay on it, or that the 7 years will just be up (not sure how close we are to that).

 

 

Is your dh also of the mind that you should not have to pay off the student loan? I can get that you didn't want to co-sign at the get go, but signing as a co-signer is exactly that. The original signer doesn't pay, then you pay.

[Twigs]

It wasn't my decision to cosign and cost us a lot of marital harmony at the time, and since, as you can imagine. I am hoping only dh's name is on there, I will have to check again. We just found out about 1.5 years ago that it's on there and is defaulted. We've been hoping ever since that he will actually pay on it, or that the 7 years will just be up (not sure how close we are to that).

 

 

That's the student loan, right? From what I understand, student loans never go away, even through bankruptcy.

[mytwomonkeys]

I went through FPU and had conflicting experience with Dave Ramsey's opinion on this. I remember from that that we should dispute charges but not be expected to pay off old charges on our credit report as part of our debt snowball. In fact, I got the impression that we shouldn't worry too much about our credit report much at all since we should be working to pay for everything in cash. But I could be way off, it's been a few years and I am clearly clueless on financial matters.

 

 

well, honestly. i personally don't worry about our credit at all. we pay cash for everything, we are debt free (thank you tax return!) & will even be mortgage free in 3 years. but in the OP's situation, she wants to buy a house & can't - due to their credit. i would pay off the balances because that is the honest and right thing to do. they can save for a house or try to work on their credit to qualify for a loan. either way, they will be better off imo. i just personally wouldn't mess with credit cards. we have in the past & that's what led us to dave ramsey in the first place, lol.

[Random]

Creditors want to see a positive history of payments. A credit card that you pay will help, a debit card or a secured credit card will not.

 

 

 

I'd just like to say that a secured credit card WILL help you build credit. A secured credit card is expensive and a rip-off unless that is the only avenue you have to rebuild a positive credit history. A debit card attached to your checking account has nothing to do with your credit score (unless you are continually overdrawing your account).

 

I'd just like to chime in with the others and say that you do have to pay BIL's payment. (I'm so sorry!) and you should do whatever you can to pay off the debts that are outstanding. Be wise about this, thought, and do your research before sending payments.

 

There are a few things that affect your credit score the most:

1-on time payments

2-age of credit available

3-% of available credit you are using each month

 

 

Here is some good information about what makes up a credit score by Clark Howard.

 

Be sure to check out his site on how to pay off an old debt. Many times, people will get scammed when they try to do this.

 

Best wishes to you.

[Joker]

We had to declare bankruptcy many years ago due to medical debt after younger dds delivery. There was really only one little problem but it was all billed as an emergency and we just couldn't get out from under it.

 

We started rebuilding it by opening one credit card. We still have that card and use it for a few bills and the occasional outing, but we pay it off every month. We were able to buy a home after three years and our credit is still good. We did have one small medical bill that we refused to pay. We were billed for cancelling. We had been long time patients and younger ended up sick and we had to go to her regular dr. instead of her eye dr. that morning. When we purchased our house, we were asked about the collections account and after we explained they said not to worry about it. The collection at some point disappeared, and all is good now.

 

You have to pay the student loan. I don't think there is any way to get out of that. It took a lot of time and effort for us to get my brother's written off after he died. They tried to make my mom pay it and she wasn't even a co-signer. I agree with everyone else about trying to pay off all the smaller debts or work with those who hold them. Sometimes, after a while they will accept a smaller amount than is due and consider it paid.

[Alessandra]

 

 

 

I'd just like to say that a secured credit card WILL help you build credit. A secured credit card is expensive and a rip-off unless that is the only avenue you have to rebuild a positive credit history. A debit card attached to your checking account has nothing to do with your credit score (unless you are continually overdrawing your account).

 

 

 

I had heard not, but I was writing off the top of my head. These things can vary, so it's good you posted!

[Mrs Mungo]

I agree that actual student loans never go away, but I have rarely seen one that required someone to co-sign. Was it a loan for school or an actual student loan? If it is a student loan, then it won't go away and it *must* be paid to clear up your credit. You have to clear up all of the debts, whether or not you think the charge is fair. Yes, that includes a CD you forgot to send back, a $100 no-show fee from a doctor or anything else on there. You won't be able to ignore them and get a home loan. That is a fact, not a judgment of any kind.

[regentrude]

It wasn't my decision to cosign and cost us a lot of marital harmony at the time, and since, as you can imagine. I am hoping only dh's name is on there, I will have to check again. We just found out about 1.5 years ago that it's on there and is defaulted.

 

How can you have found out only 1.5 years ago "that it's on there"? Surely your DH was conscious when he signed?

 

We've been hoping ever since that he will actually pay on it, or that the 7 years will just be up (not sure how close we are to that).

What 7 years? Student loans do not go away, even with bankruptcy.

[happypamama]

The house was given up in exchange for the money you owed on it - that's what it means for the bank to foreclose on it You no longer have to pay that back.

 

 

Yes to this. The deal with a mortgage is that you pay the bank money or they get the house. They got the house, so you have fulfilled the terms of the deal (unless you live in a state where they can sue you for any deficiency, but I'm thinking that seven years may be too late for them to do that); I do not think you need to pay back that debt (morally speaking). Unfortunately, you do need to pay for the loan you cosigned -- I'm sorry you're in that situation. I would work on paying back the old debts; perhaps they will work with you on payments. I have heard that a secured credit card may be a good way to improve your credit, but I think you need to work on the old debts first.

[happypamama]

I think you can go to HUD and look for a reputable credit counseling service through them.

[LucyStoner]

Did your bankruptcy not include these old small debts? Or did you accumulate these after the bankruptcy? I would take care of them, following the advice you can find on Clark Howard and the credit board forums.

 

Most of this stuff never reaches your credit report if you make a payment plan with the doctors and companies yourself. When you get a missed appointment fee, be proactive and call. If you can't pay it all at once, pay something and make small payments. If you do that it won't hit your credit report at all because they won't send it to collections.

[I.Dup.]

How can you have found out only 1.5 years ago "that it's on there"? Surely your DH was conscious when he signed?

 

 

What 7 years? Student loans do not go away, even with bankruptcy.

 

It was 1.5 years ago that we found out BIL had not been paying on the loan and it was now on our credit report. We had not gotten notices or anything before then. Since then, we have been hoping BIL will start paying it, dh will have to have a talk with him about it and try to work it out. Considering he has no kids and already owns a home, that would certainly be the responsible thing for him to do, instead of having us take over the loan. And yes, I do understand what "co-signing" meant and I didn't ever want to do it, it was dh's decision. And I didn't know student loans always stayed on your credit, now I know.

 

Did your bankruptcy not include these old small debts? Or did you accumulate these after the bankruptcy? I would take care of them, following the advice you can find on Clark Howard and the credit board forums.

 

Most of this stuff never reaches your credit report if you make a payment plan with the doctors and companies yourself. When you get a missed appointment fee, be proactive and call. If you can't pay it all at once, pay something and make small payments. If you do that it won't hit your credit report at all because they won't send it to collections.

 

I will definitely be doing that from now on. And we never did go with bankruptcy, just the foreclosure.

[I.Dup.]

Is your dh also of the mind that you should not have to pay off the student loan? I can get that you didn't want to co-sign at the get go, but signing as a co-signer is exactly that. The original signer doesn't pay, then you pay.

 

Right. Of course we are hoping BIL will step up and pay it, dh hasn't had a serious talk about it with him yet...it's usually my job to prod him to do that and I will definitely be prodding him to do that. If he doesn't, we'll have to figure out how to start paying all of it down.