I am a 30 yr old single mom of 3, preparing for a divorce and working, hoping, wishing and praying to buy a home as soon as I am able to qualify.
My current scores are:
After the leaving the military my husband and I were not able to make payments on the vehicles we had - so we elected for voluntary repossessions.
I have a medical judgment, that was a result of an accident and a workmen's compensation claim not being paid on time (by my employer) that is showing as satisfied on all of my scores, but despite all of my efforts I am not able to have it vacated - which I thought I could because my employer was the responsible party (I have the necessary documentation to show this).
There is a tax lien with the state of Alabama for $1,317.00 (that's what happens when you use a friend of the family to process your taxes, I guess).
And the rest are collection items, mostly medical.
I have been seeking help for at least two years,and no one is able to give me a clear strategy as to how I can pull myself out of this mess. Everything I've done so far has only hurt my scores and made them drop lower because the last reported date updates over time I try to pay for delete, dispute or set up payment.
I am considering a hardship withdrawal from my 401K, that will give me almost $5,000.00 to work with. I understand the tax ramifications, and the saving for retirement - but I need to be able to clean the slate and fix this.
My main question is, how could I use this $5,000.00 to clean up this mess and bring my scores out into the light!
So far, I have been told to pay off all of the collection items, set up a payment schedule with the chargeoff/repossessions (they only want a lump sum - $20,000.00 I don't have), apply for two secured credit cards and use those to establish good payment history or just let the items expire from my report and wait it out.
I am current on all of my bills today, including my rent, car payment and all utility payments.
Can someone, anyone please help me by giving me the information I need to make these next critical decisions. I want to make sure I'm getting the best advice possible and from what I've read on these boards - this is where the Experts exchange information.
I hope I have provided enough information.
Thank you in advance,
Welcome to the forums.
I thank you for your service and am so sorry you are having these troubles. I will tell you that there are many smart people here who have been where you are and know what kind of advice to give you. Take it all in, ask lots of questions, work hard, realize it will take some time to rebuild and in the end you will come out of the darkness.
One thing I will say. Never pay anyone who says they can help you "solve" your financial troubles. They can do nothing for you that you can't do for yourself.
Good luck to you.
My first suggestion is the tax lien. ANY federal debt unpaid will keep you from getting a mortgage. Get those taxes paid off. After that, you need to sit down and write everything out. Look at your collections. Are they more than 3 years old? If so, it won't help to pay them off if you are hoping it will get you a house...it won't.
The biggest "stoppers" for buying a house are any form of federal debt, a fresh bankruptcy(2 yrs or less),unpaid judgments, and current lates.
Other than that...I will let the "rebuilding your credit" experts tell you the proper way to tackle it all.
Good luck and thank you for your service.
We are finally homeowners!!
Closed May 5th-30 yr fixed at 5.25%.
Hi LightSeeker! Welcome aboard!
I'm sorry that you've found us under stressful circumstances, but I'm glad you're here. There is hope, and there's plenty that you can do to start working on the damage from the past, and building a more solid foundation for the future. There are a lot of success story (myself included) from some of the most dire of credit disasters. It'll take time and effort-- sometimes a bit of a rollercoaster ride, but you will absolutely get there. And, you can do it yourself.
First things first-- I'd strongly suggest that you start with reading Understanding Your FICO Score & Credit Scoring 101 in my sigline below, if you haven't done so already. Then, pull all three of your credit reports from annualcreditreport.com.
You'll first want to highlight any incorrect or outdated (past CRTP) items that are hurting you. Note the FTC compliance dates (the dates that derogatory information is scheduled to fall off your reports) for all derogatory tradelines. Come back here and give us all of the detail (minus any personally identifying information, such as your name, address, SS#, account numbers, etc...)-- copy & paste the tradelines if possible.
Friendly, Supportive & Respectful
"However gradual may be the growth of confidence, that of credit requires still more time to arrive at maturity” ~ Benjamin Disraeli
Thank you so much for all of your encouraging words and hearty advice, I have my pen and notepad ready. based on the first replies, I've already begun mapping some things out.
I copied my tradelines in a separate reply, hope that helps give an idea of what work I have to do.
Thank you again,
and Happy Holidays to everyone (btw).