Helping my mother rebuild

[Anonymous]

My mother has always been in a tight spot financially. After being divorced from my father, my mother remarried. The man she remarried was not good with money. My mother's credit was stretched due to not telling him no. She had multiple car loans for cars he crashed or cosigned for his kids who would just stop paying the loans.Eventually, she seperated from him and was once again on her own. However, she shortly thereafter lost her job. I had her move in with myself and my husband and two kids. She was able to get another job here, and she pays us "rent" of $450 a month and pays no other expenses. I feel bad that her whole life, her savings were nonexistent and she had nothing for herself in case she would ever need anything. My mother was able to pay off her student loans and a debt she owed to social security (they overpaid her then claimed it was her fault for cashing the checks, even though she called and they told her to cash them). 

She is doing better, and has savings now, she says it is more than she has ever had in her life. However, I want her to help repair her credit so in case she needs something she can get it. I have talked her into getting a secure Discover It card, as my husband had a good experience. $200 down/limit and only use it to pay her go-phone that is PIF monthly. After a year, she should get the deductible back and a CLI (if it goes like my husband's did). I want her to look into some more things she can do to help her credit, but I think she is weary considering how things were when she was with her second husband. 

Any suggestions on how to help her out? The only credit line she has now is the Discover card, and she has no current loans. She has some missed payments on her old student loans, but nothing was ever charged off or sent to collections. I was talking to her about getting an AMEX card possibly, but she is leary, plus I don't know her true FICO scores, she only knows her Fako scores. She has been having a lot of trouble with her debit card info getting stolen (we may have found the culprit from a particular site she was buying things from), and I think using the better fraud protections on Credit cards may be good for her since she has been so frustrated.

[Anonymous]

I just want to congratulate you and your mother on a job well done. I'm glad you are able to help her with not just material things but with knowledge. Do the $1 CCT trial to get her scores then cancel it. At least you'll know where she stands. Get her to sign up for credit karma to monitor her reports and use the annual reports for free to view her full reports (without scores). Dispute inaccuracies. Work on baddies. Give it time. Things will work out with effort and patience. Good luck to you both.

[Anonymous]

Thank you. I got her to sign up for Credit Karma, and we went through her credit reports, and everything looks correct on them.

I guess I wonder if she should try to get another credit line but unsecured and just utilize them and pay it off from her accounts. I think she is just hesitent to try that, but would yield her better protections and rewards. It is just awkward conversations for me, because I want to help but not intrude on her personal information.

[Anonymous]

I understand. I'm helping my MIL - who already has excellent but limited credit with getting her portfolio built up. Slightly awkward but she is so far please with the results, so I'm happy with that.

If she is eligible for NFCU I highly recommend her joining and applying for an unsecured card there. If you or a first degree relative (including grandparent or grandchild) is is a member or is eligible to join then you/she can join. 

Normally I'd say Cap1 is easy to get approved unsecured but they've been squirrely lately. 

She can go to the prequalification pages for the ccc's and see what comes up. Google the company and prequal together and up it will come.

Hard to say much else without knowing her scores. 

[Anonymous]

Update: Just wanted to post an update.

My mom has been watching her Credit Karma and her score has been trending up. She has not had anymore issues with someone nabbing her debit card info, so I think we figured out what site was causing it.

I gave sent her an invite through my AMEX card and she applied for Blue everyday and got approved for a $2k SL. So now she has AMEX and Secured Discover. I have encouraged her to use the credit cards for everything she can, and just pay it off straight from her bank to help prove she can utilize responsibly.

We also disussed broadening her credit types, and since her car was starting to crap out and she really has no bills except her phone and the little bit she gives me to cover food expenses, I took her to a car lot and she was approved for a new car. Her HP for the dealer came back at 675. First new car she has ever had and the montly payment is reasonable and still leaves her a good amount $$ each month.

So hopefully things start going in a good direction for her.