Helping GF get out of a hole...need advice

[Anonymous]

I looked at my girlfriend's experian credit report & score this weekend, and needless to say it's not pretty. Her score was around 550, and she has 3 charge off's. One is paid, from First Premier Bank. Another is paid, from Macy's. The third is unpaid ($769), and is listed under Credit One Bank as well as CACH LLC (collections agency). She also had a closed account from Wells Fargo with a balance of $700 that she has been paying off monthly. She's currently 24 years old, and has no open credit cards.

The first step I took is to completely pay off her Wells Fargo account so that it never appears as a charge off, and she did this yesterday. I am having her contact Credit One Bank tomorrow in order to try to negotiate a "paid as agreed" if she pays the entire $769, although I suspect they will just forward her to the collections agency.

In the meantime, I would like to set her up with a credit card so that she can start rebuilding credit. I know that she would have a tough time getting one on her own, so I'm hoping to use my credit to her advantage. My score is in the high 700's. In regards to the credit card, I need some advice.

She is going back to school in January...would it be easiest to get a Student Credit Card once she is enrolled, or would she not even qualify for that since her score is so low?
My second option is to open up a Joint account, but I'm not familiar with how easy they are to set up. Would we be turned down because of her credit, or would they care more about my own credit (and therefore be more likely to approve us)?
My last option is a secured credit card, but I would do that as the last resort.

In regards to the Joint account, I am fully willing to do this because I have complete trust in her going forward. It's just that, like most people out there, she was very naive about Credit and didn't know how these things could affect her.

Message Edited by SanFranMatt on 09-16-2007 06:28 PM

[Anonymous]

This is very difficult for me to write- because it is obvious you trust her- but I personally believe that you need to make HER read everything on this site, and have HER work on her own GW's and PFD's and open credit in her name only. I know you trust her very much, but you can wait until you get married to do join- and it will be better before you get married for her to have just as good credit as you do so you don't enter marriage w/ credit issues.

I would NOT help her open a credit card because she needs to learn on her own how to handle her finances- trust me, I am a female who made the same mistakes she did- and she is young enough to recover very fast if she uses all the info on this board. Cosigning or jointly apping for her is just going to give her an easy way out- and I really , really feel she needs to do the work and learn on her own.

However, you can spend  good quality time researching the site together- and you will be setting up good financing habits by working together reading and learning.

This is just INHO.

[Anonymous]

I agree 100% with netpather!!!! Most of us learn by our own mistakes. Its time for her to start learning.

[Anonymous]

Correct me if I am wrong.. But I thought an AU on a credit card will no longer show up on reports.  I think 2 of the big 3 reporting agencies already made that change and the remaining one will change on January 1st. Having your GF as an AU won't help your GF's score.

I don't understand the joint checking account thing. I don't see how that will help your GF's score.. Checking accounts seldom report unless you have Overdraft Protection or a credit line attached to it. If you  have OD protection.. I think only the main account holder will be reported to the CRA's.

Sometimes a mortgage or car lender may want to know you average daily balance, or current balance. I suppose having two incomes in one account may make the balances higher, but it will be no different than telling a lender "we each have our own accounts.. Here is the balance from checking account number 1 and here is the balance of checking account number 2.."

[Anonymous]

Update:

She called Bank One, and they did tell her that they no longer have her account and referred her to the CA (CACH LLC). After she called CACH LLC, they referred her to their lawyer (Bronson & Migliaccio), both of whom have horrendous reputations from our research.

We drafted a PFD letter to send to CACH tomorrow (the letter was taken from this site), and she is indicating that she is willing to pay in full ($769). Wish her luck!

On a side note, I'm wondering if it's normal to have the $769 listed twice on the Credit Report? It is listed as a Past Due Balance with the CA and a Past Due Charge Off with the OC. If she gets this deleted from the CA, will both of them fall off of the credit report?

[TryingVeryHard]

Wonder how this ends up