Starting over and rebuilding

[Anonymous]

I'm new to this forum and starting over is scary. Me and my husband are both 40 years old and we have been together since we were 16. We both never really paid much attention to our credit growing up and pretty much ruined our credit up until this point. Now we are trying to clean up our credit for the first time and to be honest I'm confused about where to start. I've ordered both of our credit reports and I have about 4,000 in medical bills, along with student loans and some collections. My husbands credit is a little better than mines he also has student loans and since he never goes to the doctor he luckily doesn't have but a few medical bills and a past sprint charge off. His scores are in the 500's and mine are in the 400's. Our income is around $50,000 annually combined, but we are coming into a small settlement from an auto accident after some creep decided to cross the intersection and slam into our SUV trying to get into a mcdonalds parking lot.

My question is should I use the settlement to pay off some of our debt on the credit reports first, then apply for secured credit cards? I'm willing to do whatever it takes at this point. I want a future loan to open a laundromat one day. Any advice? Thanks

[daddiggingout]

Tonya,

I get the frustration but I would put the money coming to you in emergency savings - seriously, put on the television and be thrilled you have some extra savings to buffer you with whatever comes down in the future.  My personal take would be to use a couple thousand to get two secured credit cards from the approved lenders her on My FICO and start getting some positive credit going.  After doing this, spend a few hours a week pouring over the many informative posts on this board and you will learn how to proceed on this journey. 

I hear the frustration and desperation in your post and just wanted to say it does get better with hard work, determination and time.  So get reading and good luck!

[Anonymous]

Thanks for the advice. I'm so glad I found this forum. I'm excited to get started on my journey to good credit! I plan to update my progress as well. 

[Anonymous]

You should get a secured from BOA or Merrick Bank. Just one $300 on one and $200 on another.. Then on any medical bills, lookup HIPAA process and follow it. On the non-medical bills, you would want send them Debt Validation Letters which you can find on here. If they validate the debt then you would want do a PFD which is a Pay for Delete letter. if it's alot then you would want offer a Settement typically 20-30% of the orignal amount. 

I always recommend going directly to the OC before going to the collection agency if you do make payments if the debt hasn't been sold to the CA.

The amount of the secured card isn't going to make a bit of difference.