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newbie with questions... nervous

kcam213
New Member

newbie with questions... nervous

Hello, so I am new to the forum and have quest.

 

I recently BK, DC 8/24/17.  Trying to rebuild to a good credit rating.

 

Here's my story.  I was able to carry a house and car loan through the BK. My mortgage fell behind during BK proceedings due to bad advice from BK atty. House went into f/c but I was able to qualify for Hardest Hit rescue grant and mortgage is now current. 

I had to keep a car loan I got (duress loan after total vehicle loss).  I wanted to return car but without the high payment I would not qualify for ch.7.  So the car loan... great intetest rate thru c/u (3.5%) but principal amount is higher than market value.  But car is in great shape and I was able to cram down the prinicipal to within 5k of market value. 

So I am in really great shape post BK due to I have a car loan never late on and great interest rate... and home equity on my house somewhere around $60k.

 

I was in the market for a 4WD vehicle used because the car I have is terrible in the winter.. (hence the reason I wanted to retun my sedan during BK).  So my solution was to get a used jeep for winter driving only.

 

Post d/c I started looking for used jeep... and found the ones I could nearly pay cash for but wanted to get a small loan to be able to save my cash for emergency fund...but those vehicles would not get loaned thru finance companies... they prefer something newer, less miles (ie, MORE MONEY).

 

So I just got a loan for a used jeep $6k.  Interest rate 22%.  my payment is $249 for 54 months.  I have another vehicle paid for that I am selling and is worth around $2k.  So I planned to sell that jeep take the $2k and put on principal of the newer vehicle... taking my principal down to $4k and then just focus on paying off that jeep in 1 year's time.

 

I got some pre-approvals for cc and I received credit one $300 cl, and Cap one plat. cl $3k.  my equifax score is 649, but my fico score TU according to dealership was in the 530.

 

I found this forum today and I can see I am not following the plan.  And I am nervous about making new bills... I have credit cards for about 2 weeks now and haven't really used them... I just been paying cash for everything.

 

What do I do now?  I just pulled my reports and found that my mortgage still shows late.. so I have challenged that... becuase mortgage is now current.  Also a child support issue is showing delinquent... but that was inaccurate from the intitiation.  I had paid ex CS directly... and there should not have even been a family court account set up.  I tried to get that straightened out.. but then ex died suddenly.  I became sole parent of our child... and the CS case was closed, and the $$ they had started garnishing from my check (because I coudln't get it straightened out with the court).... well that CS $$ sat in an account untouched for 6 months after ex passed.  Eventually they stopped garnishments, and returned the money to me... but that delinquent amount still shows up on my credit report.

 

Well, that is my sordid story.  I want to know is my score not that bad?  The finance manager at the dealership sounded really surprised.  Also, should I use these cc?  How much.. should I pay in full before bill is due to avoid interest rate... or pay all but 10% so that they report.  And what is prudent things to use credit cards for??  I don't want to get into trouble again... so I am gun shy.   also, my new bank was pushing me to open an equity line on my house ... I have never done that before... so I am  leery as well.

 

Thanks for advice.. I will read and learn.  First time being single and having to deal with my own financial decisions.

Message 1 of 5
4 REPLIES 4
medicgrrl
Valued Contributor

Re: newbie with questions... nervous

Welcome to the forum's!  

 

I would contact the agency that was handling the child support and see if they can get that removed.  Cleaning up your credit report can be a long process but is well worth it due to the savings on interest on future loans.

 

As for the credit card...use it for things you need such as groceries and gas.  If it's a rewards card, use it as much as you want and just pay it off often.  You will want to leave a small balance of less than 9% when the statement cuts.  After that, just pay it off.  The goal is to avoid interest charges while utilizing it enough to improve your credit.

 

As for the auto loan, pay that off as quickly as possible so you can reduce the interest you're paying.  



EQ 778 EXP 782 TU 729
Message 2 of 5
kcam213
New Member

Re: newbie with questions... nervous

Thank you for the reply!

 

So if I pay off the balance after I get the statement bill, but BEFORE the due date, I will avoid interst?

 

Thanks again

 

Kristen

Message 3 of 5
NormanFH
Super Contributor

Re: newbie with questions... nervous


@kcam213 wrote:

Thank you for the reply!

 

So if I pay off the balance after I get the statement bill, but BEFORE the due date, I will avoid interst?

 

Thanks again

 

Kristen


Pay it down (to less than 10%) BEFORE the statement closes. Do not wait for bills to arrive in the mail.

Most Recent FICO 8 Scores EX616/TU587/EQ607 01/09/2018 Starting scores 553/485/543 08/25//2017
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Message 4 of 5
kcam213
New Member

Re: newbie with questions... nervous

Thank you!
Message 5 of 5
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