Ask:
Okay, I'm kind of confused about what we should be doing regarding our credit history/debt. I have done tons of research online and talked to several people I have come up with mixed results. See, when DH and I got married, we had a lot of medical issues, and junk happened and to make a very long story very short, we tacked on like $6k in medical bills to our $4k of school loans that we had on our credit card. When we moved back to DH's parents house to build our house next door, I was super pregnant and very overwhelmed with working and our finances were so screwed up that my MIL pretty much took over... meaning, I paid her the money that was owed and she'd make sure the payment got in on time. Which was fine. The card was in DH and MIL's names, so we were building up our credit. Which we needed to do. The card was at like 9% or something, and then MIL got an offer for 2% APR, so she switched our balance over to that card, along with a bunch of their debt, and some debt from my SIL. So on the 2% card, there is a huge balance, of which about $9k is ours. Anyway, when MIL switched balance to the 2% card, they wouldn't approve DH's name to go on there with her. Which means none of the payments we're making are building up our credit -- they're just keeping theirs in great standing, pretty much. MIL told me that when we move, she'll have to determine how much of the debt remaining is actually ours so that we'll know how much we have left. The thing that I'm concerned about is this: if we don't have the credit in our name, we can't build it up at all, correct? My mom told me that I should get a store card, which I've kept a Victoria's Secret card since before we were married. But it hasn't done anything to help our credit. Would it be better for us to have our cc debt on a credit card of our own and pay down the balance, even with a high APR? I know the high APR would really suck, and would make the payments a little higher than they are right now, but if we're not working to build our credit history, then in the future, we're not going to be doing very well to have any credit for anything. We might want to buy a house or something. (The one we're living in is owned by my inlaws. They built the house, putting all the costs onto a credit card and we're paying the monthly payment as rent. So when we leave, someone else will just have to take over the payments, as they only locked us into a one-year lease.. and we've been here almost 2 years.) Anyway, I know that our building credit is important. But it's so frustrating to know that I've been keeping up with the VS card and it hasn't helped us at all, and our credit is in someone else's hands with no way for us to build it up.. and then some friends file bankruptcy b'c of massive cc debt and 3 months later have an approved card with 19% APR, when we can't even get approved for anything. anyone know anything about all of this?
Answer:
Oh wow. First of all, you are right. You are only helping your MIL and their credit rating, not yours.
Second, before you can build credit you need to establish credit. I would suggest going to a credit union (if you have one that is near you) and open an account. You can open credit union accounts with as little as $10. Then get a CC with $2000 available credit. Charge some on that, making sure you pay off the balance each month. That will help you start to build credit.
Also, having utilities in your name, a gas card, or other loans (such as a mortgage) will also help build your credit.
Finally, I would suggest going to this website - it's a good place to get informatiaon on building credit, getting out of debt, and other money saving ideas.
Good luck!
Answer:
Please do not go get a credit card and pay interest on it just to 'build up' your credit. You can easily get into a lot of trouble quickly that way. Do you have a car you could refinance and then pay back MIL some of the money owed and then pay the car loan to build up your credit. You can get a credit card and charge a few things a month and then PAY IT OFF every month. That will also help build up your credit without finance charges. Don't do that though if you are not disciplined enough to restrict yourself from buying things you don't need and that you can't completely pay off every month.
Sounds to me like your priority right now might need to be to pay off the past debt amount. Your MIL is still paying interest on the amount so it is just growing every month. I would pay that off first - but I don't like borrowing from family so that would be important to me.
Answer:
Originally Posted by anniebananie
Oh wow. First of all, you are right. You are only helping your MIL and their credit rating, not yours.
Second, before you can build credit you need to establish credit. I would suggest going to a credit union (if you have one that is near you) and open an account. You can open credit union accounts with as little as $10. Then get a CC with $2000 available credit. Charge some on that, making sure you pay off the balance each month. That will help you start to build credit.
Also, having utilities in your name, a gas card, or other loans (such as a mortgage) will also help build your credit.
Finally, I would suggest going to this website - it's a good place to get informatiaon on building credit, getting out of debt, and other money saving ideas.
Good luck!
Thank you. We don't have any utilities or anything like that in our name.. since we live next door to my inlaws and are all connected into them, everything we rack up, we just pay money to them to cover the costs. I am not doubting that they have blessed us and helped us through some very hard times. But I am concerned as to how much this is really holding us back in the long run, and wondering what on earth will happen when we move away, and are totally bombarded with everything all at once. That is, if we ever can put our debt in our own name and build it up by ourselves. Maybe I'm sitting in a sinking boat when i say this, but I'd rather have the credit in my own name to make mistakes and successes with just me (and DH) to blame, than to know every check I cut to my inlaws is boosting their credit history and not touching ours.
Answer:
We have a credit union and as long as you live in that county, you can join.
We got one secured (our own money) for $500 to build up credit, the percentage is like 11%. We just refinanced to pay off some debt and my credit is crappy, so I will get one in my name too to build up my credit.
Answer:
Shabin, for that secured card you got, you set aside $500 for it and they put it onto a credit card as an allowance to be used.. so you can use the card like a credit card and it just subtracts from the $500 balance? or am I TOTALLY wrong? Sorry, I dont know anything about credit unions..
Answer:
Originally Posted by flybygrace
Thank you. We don't have any utilities or anything like that in our name.. since we live next door to my inlaws and are all connected into them, everything we rack up, we just pay money to them to cover the costs. I am not doubting that they have blessed us and helped us through some very hard times. But I am concerned as to how much this is really holding us back in the long run, and wondering what on earth will happen when we move away, and are totally bombarded with everything all at once. That is, if we ever can put our debt in our own name and build it up by ourselves. Maybe I'm sitting in a sinking boat when i say this, but I'd rather have the credit in my own name to make mistakes and successes with just me (and DH) to blame, than to know every check I cut to my inlaws is boosting their credit history and not touching ours.
You're not sitting in a sinking ship. You just aren't going anywhere right now. When you get out on your own, you will, by the nature of either having rent or a mortgage, along with utility payments and such, build up credit. I agree with Lou - don' t get a credit card just to pay interest on it. The best way to build up credit with a CC is to charge something small and pay it off at the end of the month. If you can't pay for it with cash (and set the cash in an envelope to pay the cc bill with), then don't buy it.
It takes time to build up credit, and if you have past debt, then you do have some credit, maybe just not very good credit. Pay that amount off. That should be your first goal.
Answer:
go to your bank and plop down $300. Ask for a securred credit card. ( the limit will be 300 as the amount you put down.) then pay for 1 tank of gas (or what ever) with it each month BUT pay off the balance!
after like 6-8 months you should boost up your credit by like 300 points
Answer:
Keep your credit cards with the longest history. I've been told not to cancel many cards at once. I also don't recommend getting a home equity loan--sounds good on paper and we canceled all our credit card debt only to charge it up again. then not only did we have the home equity loan to pay we also had new credit card balances.
Thanks to Pres Bush and the credit card companies living in his back pocket interest rates on credit cards have shot up. I was looking at my discover bill, I pay $140/month and if I remember right on $20 goes to the balance. Depressing!!!!!
Check into Mary Hunt's rapid debt reduction plan (pm me if you want me to explain it). I think I'm going to start with the Discover bill and pay them off from there.
Good luck! We all have to stick together or we will get depressed and give up.
Answer:
Originally Posted by deemom
Thanks to Pres Bush and the credit card companies living in his back pocket interest rates on credit cards have shot up. I was looking at my discover bill, I pay $140/month and if I remember right on $20 goes to the balance. Depressing!!!!!
I'm sure you meant no harm, ,but in this forum, we try to refrain from political statements regarding the economy and focus on how to save money.
However, just to clarify, interest rates have actually risen because of the Federal Reserve Board has raised the rates that they charge to banks several times over the past two years, in order to slow the rate of inflation. The federal reserve is indpendent of the Executive, Legislative or Judicial branches of Government. They look at the overall economy of the country and do things so that we don't experience 16% mortgage rates and such as we did in the mid to late 1970s.