Middle of the journey, looking for additional guidance

[Anonymous]

hello all

I posted back here a few years ago, been trying to do a few things here and there.   Recently I've been listening to Dave Ramsey podcasts, and I must admit I really like his advice to basically shutup, live on less than you earn, quit being stupid and live like no one else to live and give like no one else.

However, the caveat I  encounter here is that I set myself up on a path to repair credit first, so I'd like to accomplish my mid-700 credit score first.  My thought process is to get my score up as high as I can, refinance the two cars I pay on (definitely anti-Ramsey lol) and eventually procure a mortgage once I settle in with my career.

I am working my way up to a higher paying position within my company, but while I'm on my way up, I am working on my paying off debts and cleaning up my credit.  

For better or for worse, I am trying out Lexington Law. So far, in less than two weeks, they've removed two negatives.  I don't have many, I believe I started with 15, so I don't intend on paying for their services more than a couple months or so.  This is purely a lack-of-time endeavour that I can't focus on myself.  My hope is the bump in credit score will yield the ability to refinance the cars, saving me a few bucks a month, offsetting the cost of the LL program.

Two years ago I enrolled in a credit counseling program, which lowered all my APR's significantly, but charges a $55 monthly fee.  I've been able to pay off a few cars this route, but am curious as to whether or not I unenroll from the counseling program if that would increases my score?  Not sure what the effects of that would be.

If I do unenroll, it is possible I request a debt consolidation loan to continue streamlining my payments.  Although the rates may be 20-25%, that may still be equivalent of the $55 fee the debt counselor charges, without the "managed by a financial counselor" remark on my credit.

I typically reference Credit Karma for a general idea of my scores.  I know they aren't accurate, but for a free guideline, I use it.  My scores today have dropped down to 628 EQ and TU.  Strange, as the only changes have been a negative remark removal, name on card change (Chase to JPMCB Card Services) and an account balance decreased. 

Just wondering what some of you all think of adjusting my path a bit to ultimately reach my 750 endgame and then bail out of the credit game altogether, per Ramsey.  

[Anonymous]

A few thoughts...

The results from Lexington Law will most likely be minimal at best, and a lot of lost $$ paying for their services. Don’t be shocked if some of the items they get “removed” reappear before too long.

Dave Ramsey - might have some good advice, but overall is out of touch.

Get to 750 and then “get out of the credit game” - if that’s what’s best for you, cool. If you don’t utilize your credit, don’t expect it to stay at 750 for long though. Credit is not evil by any means (here’s looking at your bad advice Dave Ramsey!).

Good luck to you, however.

[Revelate]

The fact that you are financing cars and considering a mortgage should show you the fallacy of Ramsay’s credit arguments.

The rest of his advice I don’t take much exception to: certainly living within one’s means is a laudable goal.

The debt management program is penalty, maybe if you unenrolled it works but 55/month sounds like a lot to me for a service, how big is your revolving debt and how much a month did the service save you in interest?

Also you came here 4 years ago, how long before the SOL is up on a lot of those negatives? 7 years on those negatives likely isn’t that far off from a credit reporting perspective.

Ultimately a consolidation loan if the APR is above your current APR doesn’t make much sense.

End of the day if you are making the effort (LL can work but there are a lot of reports of stuff coming back) to build and clean your credit why would you throw that resource away?

Doesn’t really compute.

[Anonymous]

I think Ramsey has sound advice for those making $100k+, but I'm not there yet

Some of the things I've done, and continue to do, contradict one another. This is when I realize I need to seek advice, which often varies considering what advice I need.

Credit score has resurfaced as I made strides to get to 680, then suddenly went down to 580. I don't remember a singular catalyst for that drop, so I figure it was a combination of things. Perhaps some of those things a firm like LL could address.

I don't like hearing the negatives may resurface. That's futile lol

The only two negatives I was aware of currently were a 30 day delayed payment to a card I thought was on autopay and a collection account for $89 I've since paid off. It was a miscommunication between the college I was attending and a student loan that never dispersed. Those delinquencies were within the last 2 years though.

If those are removed, and I continue paying down my debt, I hope to be near 680 again by years end.

If I cancel the debt program, that may hinder my score further? I won't cancel if that happens, but if the removal can increase my score, I will. I intend on making the payments either way.

[Revelate]

I’m over 100k but paying cash for say a house in today’s market is a complete fail when looked at in cold financial terms. I personally will never agree with Ramsey with regards to credit: sure some people have issues managing it, but if you can manage it, do so. It’s another available resource you don’t even have to leverage it but you at least have to maintain it.

I don’t think many people can really state what would happen if you were to cancel the DMP; personally I would rather have the 660 per year go to debt payments I suspect the DMP notation stays on there regardless.

I would at least investigate it

[Anonymous]

That's what I'd rather have as well; the 660/yr could pay off one of the balances I have left on one card actually.