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Can't seem to make any progress!

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Anonymous
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Can't seem to make any progress!

I have been trying desperately to raise my credit scores over the last few months and can't seem to make any progress at all.  I currently have a 30 day late on a car loan that was paid off a year ago that I am trying to get corrected.  Other than that my biggest problem is that I have a utilization on my credit cards of about 95%.   My credit scores are: EQ 583; TU 620; EX 571. 
 
1 - I currently have a take home of $3600/month.
2 - Mortgage is $900/month.
3 - Car payment is $500/month.
4 - Ins is $90/month
5 - Cell phone $150/month
6 - Utilities are $350
 
Plus I am a single mother of an 18 year old college student so of course I periodically send money to her.  ($100-$150 a month depending on what's going on.)
 
I just can't seem to find money to pay off these credit cards.   I have equity (about $15k-$20k) in my home but don't think I can get a home equity loan or line of credit with my scores.  It's like a vicious cycle. 
 
Any suggestions??
Message 1 of 11
10 REPLIES 10
Anonymous
Not applicable

Re: Can't seem to make any progress!

twt, I know exactly what you mean. I was in exactly the same circumstance last winter. My heart goes out to you.

Are you still using your cc's? If you are, I'd stop using the credit cards altogether. Stop total...cold turkey. Take them out of your billfold, put them in an envelope, seal it and put it at the bottom of your clothes drawer. Pretend you dont even have them. When your cc statements come, pay as much as you can comfortably afford.

That's what I did, and I'm glad I did. I actually felt good about NOT using those things.

You will have to go to the bank more often for cash, to be sure. But you are assured you will not be contributing to any more cc debts. That goes a long way in bringing down the utilization.

Everyone's situation is different, but I withdrew money from my savings, to pay down on the credit cards. It was difficult, for it was a considerable amount given my situation.
But I'm glad I did. It's enabled me to re-establish myself in the credit world, and get credit line increases, plus a few new cc's.

Good luck to you dear. I wish you well

"Never, ever, ever be late. Never"
Message 2 of 11
Anonymous
Not applicable

Re: Can't seem to make any progress!

What financial software do you use?

Do you have a budget? Are you sticking to it?
Message 3 of 11
haulingthescoreup
Moderator Emerita

Re: Can't seem to make any progress!

Just from what you listed, you should have a good chunk of change at the end of each month, even after groceries and things you didn't list, but it's always amazing how money drains away.
 
Here's what I would do: tell yoursefl that you just got hit with a pretty brutal pay cut. Say $1000 less/ month after taxes. Suddenly, you have to live with $1000 less. How will you do that?
 
A lot of times, when people try to set up a budget, all they do is write down what they're spending now. That doesn't really get you anywhere. Go in the other direction. Write down $2600 and subtract $900, then $500, then $90, and so on, until you see exactly what you've got. Then you start with the painful decisions. I've got a daughter in college, too, and they are hungry beasts, but yours might need to pick up a couple of hours at the local pizza place. And so on and so forth. If you have a hard time being self-disciplined, label some envelopes with each budget category and put the cash in them that you've budgeted. When you run out, then you're done buying stuff in that category for the rest of the month.
 
Use this money to pay your cards down, down, down. There are lots of raging arguments about whether to pay down the smallest balance or the highest interest card first. I favor the smallest balance card, because you are not only penalized on your scores for your overall high utilization, but for the number of cards with high util. If you can quickly get 2 or 3 down below 10%, that will goose your scores. Obviously, you then take the money that you used to pay on those and make even higher payments on the bigger balances.
 
Don't let yourself feel deprived--this is very fixable! Let you daughter know what you're doing (not guilting her, just informing her.) My kids watched me go through this same process a year and a half ago, and I not only picked up some admiration points from them, but they also are now incredibly cautious with their own cards and finances (so I get some Mom points in addition!) good luck Smiley Happy
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 4 of 11
Anonymous
Not applicable

Re: Can't seem to make any progress!

cell phone $150 a month?????   why   I have daughter in collage also.This is how I feel...collage is for learning!!!  My kids will never go hungry or need medical attention!! She has 1 cell phone which is part of my family cell plan  $50 a month...300 min a mo. cell phones are for emer.only...if she wants more mins or spending money  get a job!    She is a AU on my CC  but it is for emer. only also. If she needs something let me know I will ok CC use or not.  She can call friends & family by cell on free weekends & nights. She can call home for free. 
 
The sooner kids learn how to handle money and credit the better for them!
 
Stop using your CC & start paying them down!
Message 5 of 11
Anonymous
Not applicable

Re: Can't seem to make any progress!

I know what you mean. I have tried for months to get my credit score up.  I had nothing but a mortgage on my credit and have paid on time for the last nine months, no help.  I opened up two credit cards 6 months ago, paid on time, no progess and yet I see people on here that have their scores improved in a matter of 2 months.
 
** In reference to you home loan, my scores are a little less than yours, median is 582, but I have over 100k equity in my home.  I got denied and was told by my mortgage company that the industry standard is 650 median score, now I have this hard inquiry on file with a denial to back it up **
Message 6 of 11
rudy
Regular Contributor

Re: Can't seem to make any progress!

everyoe has told you pretty good advice. However, it is your choice. Sit back a minute and look deep into your finances. See where you can cut the fat. Those extra dollars will help you pay those cc's. if that is the problem. Do not be afraid to treat yourself to something, but spend cash not credit.  It will make it easier to pay those cc's.
Pick a card anyone of your cards. I would say the one with the least amount owed. Pay it off. Look at the one's with high intrest. Send them something extra each month. With the money from the paid off card use it to pay off another. In due time they all will be paid off and your credit score will increase as you go.
Do not be afaraid to tell your daughter that things are a little tight. So those extra alotments might not come as often and as much. Which means she will have to tighten up as well. It will be real good for the both of you. You both will progress and you both will the benefit. Kids understand more than we know. We as parents have to be honest with them....
Message 7 of 11
Anonymous
Not applicable

Re: Can't seem to make any progress!

I am no expert here but I love budgeting... Based on your income and your monthly expenses :
 
 3600.0
 
Message 8 of 11
Anonymous
Not applicable

Re: Can't seem to make any progress!

I am no expert here but I love budgeting... Based on your income and your monthly expenses :
 
  3600.0
 
Message 9 of 11
Anonymous
Not applicable

Re: Can't seem to make any progress!

I am no expert here but I love budgeting... Based on your income and your monthly expenses :
 
    3600.00  Take home
-     900.00 Mortgage
      500.00 Car
      90.00   insurance
      150.00 Cell Phone
      350.00 Utilities 
     150.00 Daughter In School
_________________________________________
Still leaves you about 1500.00 per month
 
If you put 125.00 per week for food and play you still have close to 1000.00 per month  to pay off those cc's.... Cut coupons for groceries, try to save money other ways sacrifice for a few months (no new clothes, shoes, is that dinner out really worth it??) Again I am no expert but I do know how to survive on a FIXED, VERY FIXED income....I love all the help here and you will find very nice helpful people.  I do not own a home yet but when I do I will try very hard to keep the equity in there....you never know
 
    
Message 10 of 11
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