When my fiance was 18, his family was looking for a house. His parents had horrible credit and could not get a mortgage. So they decided to put his name on the loan. Fast forward 8 months, they foreclosed. Fast forward 2 years 1/2 years, we decided to get married.
I have the highest credit rating possible right now. I’ve never missed a payment on my car loan or my 3 credit cards. However, this mortgage foreclosure is going to follow Jaime around until 2006. This, understandably, makes me very upset for a lot of reasons.
If you were in this situation, what would you do to improve the credit until 2006 when it’s cleared from your record? We talked to the credit companies (Trans Union, etc) and they said there isn’t much he can do about removing it since he was 18 when he signed it.
Any advise would be appreciated right now. I’m kinda freaking out, especially since we are trying to get into an apartment right now, and one month from today, we will be married, on our own, and living 700 miles away from my parents.
This is stress I don’t need, but must find a way to deal with. So, what do you suggest?
He can’t get that removed, but he can add positive marks to his credit report. He can also add a comment about the foreclosure to his report, i.e. “It was my parents house, which I cosigned because…” Talk to the three main credit reporting agencies about how to do this.
He could get a secured credit card with a small deposit and therefore, a low credit limit. Use it for one or two things each month that you would have paid cash for. Pay off most of it during each billing cycle and repeat the process.
Pay off all utilities on time. A few of them report good customers, many of them report late ones.
The rules for loans vary greatly. Some lenders won’t want a foreclosure on the report, period, while others don’t care as long as it was five years ago, etc.
All you can do is keep plugging away and avoid any mistakes along the way.
Basic advice: keep your finances and credit separate and it will not affect your credit. he will just have to rebuild his own with time
>> they decided to put his name on the loan
Well, no, he decided to let them put his name on the loan.
>> this mortgage foreclosure is going to follow Jaime around until 2006
Well, yes and no. It will be in his credit report until then but even after that on some credit applications he will find the question : “Have you ever declared bankruptcy?”
This will go away gradually, its importance will diminish with time and he should just rebuild his credit starting right away.
Well sailor, you are correct, however IMO (from what Pepper has told me outside of this) he was coerced very heavily into it. Let’s give him a break - he has learned, works incredibly hard, and has done everything right in the 2.5 years since.
Does anyone have any links, or specific companies that might be good choices for secured credit to re-start a good record?
I did not mean to pick on him, especially since I don’t know him. My point was, (and is) more of a Notice to Mariners: What you got at the end of your hand; your signature, is dinamite. It can blow up in your face. Be extremely careful with what you sign always. The creditors are not going to listen to your reasons: they only see you agreed to sign.
If you are coerced into something, be aware of the consequences. It is no good to risk huge trouble tomorrow to avoid small trouble today.
Also, Probably the best way to reinstate his credit is to keep their finances separate. Then he can get a co-signer… which can probably be her. So he is in a pretty good situation. In other words, he can get credit as long as she can get it and he can rebuild his credit history. Of course, if he messes up, then he’ll ruin his own credit once again plus any cosigners.
Needless to say, all those Spammers who promise to clean up your credit are pure crap.
Unless you want your credit to be as fucked up as his, for as long as it lasts!
Or you can just go ahead and fuck up your life (I would have a problem marrying someone with this hanging over his/her head; do you know everything you need to about this person?)
Pay me now, they will all say, do you want go into this later?
Fuck fixing the credit, you need a more responsible person as a mate…
As opposed to the irresponsible post such as the one immediately above this post.
People. Please. Stop it.
Pepper asked what was IMO a direct and straightforward question. She phrased it politely and properly, and asked for help. She does not need people giving her shit like Daemon just did. Things like that make me, how shall we say, “unhappy”?
I understand if you are unable to, or simply don’t care to, give help to a long-standing Board member. She struggled for a bit about posting this even, and I talked her into it. But please don’t pick on her and her fiance like this. The guy has one mistake in 2.5 years. A lot of 18 year olds have done an awful lot worse shit to mess up their credit than trying to help their own family get a house to live in.
You might want to check out this site.
Does he have a checking/savings account? If not, he needs to get one. I would recommend you not cosign any loans of his. There’s no need to ruin your credit in the process. Besides the credit card, if he has a savings account, he can probably get a small loan from the bank. Take the money that he borrows and put it right back into his savings account. Then pay that off on time.
Avoid the credit “fixers” that advertise all over the place. They are either scams, in that they don’t actually do anything other than temporarily get an item removed while they’re disputing it, or worse, give you illegal advice, such as getting an EIN from the IRS. Do you really want to piss off those guys?
There are legitimate agencies that can help when you have credit problems. They help you change your lifestyle, create budgets, show you how to contact credit reporting agencies, etc. The good ones are easily identified, in that they are free of charge. 
You could checkout Experian’s Credit Advice page. There’s not a lot of information on the page itself (hmmm… I’ll have to talk to someone in Consumer on Monday – I work on the Business side) but you can e-mail a question from there. You can also call 1-888-EXPERIAN (1-888-397-3742). There is a General Questions Form you can use too.
Basically, derogatory information is deleted after 7 years (although some derogatory information can remail for 10 or 15 years). here is the page with the current questions, which deal with bankruptcy and court judgements.
“We talked to the credit companies (Trans Union, etc) and they said there isn’t
much he can do about removing it since he was 18 when he signed it.”
There ya go. There isn’t anything you can do, although calling Trans, Etc, would have been the first thing I would do. You should avoid any comp that says they can correct your credit for a fee though.
>> I would recommend you not cosign any loans of his. There’s no need to ruin your credit in the process
DMC, bad credit is not the plague. You cannot "catch"bad credit from someone who has it. As long as she fulfils all her obligations she will have good credit. If she cosigns a loan for him and he defaults, then she is on the hook but as long as she pays she will still have good credit.
If your advice means she should not sign because she would become responsible for his responsibilities, you are right, but that is not what she asked and, if she is going to marry the guy I would think she trusts him. Whether the trust is deserved you and I do not know nor are we to judge as that is not what she asked.
If your advice means her credit will suffer by cosigning with him, I believe you are quite mistaken.
Your credit history is just that: it shows whether you have met your obligations in the past or not. If you meet them, you have good credit. You cannot get bad credit by just shaking hands or kissing someone with bad credit.
He has a checking account. It’s not a huge balance (Right now it’s at about1200) but we keep it pretty steady. Of course, he works 14 hours a day so we can keep it here, but hey, you do what you have to do.
Yes, he learned this the hard way. sigh
Your advice, sailor has been excellent, and brought up a few suggestions that I hadn’t thought of. I’ll bring these up and discuss it with Jaime and begin to form a game plan. I really appreciate it.
handy, with all due respect, there has already been fabulous suggestions made my three other very intelligent posters. I think you are mistaken.
And thak you DMC and Johnny LA for your suggestions. I really appreciate them. Maybe this won’t be as bad as I thought it would be.
And thank you Una.
Don’t stress too much about getting an apartment/lease. I have very bad credit-I was sued, but never garnished and I’m still paying that off. Plus the other credit cards that show as “slow pays” on my report. When I moved to Atlanta, I expected to have a hard time finding a place to live. I mean, I can pay my rent, and I always pay it on time, but I’m considered high risk because of mistakes that are all my own.
When I moved in here I was asked by the agent what he would see on my report-because I told him up front that I had bad credit. I told him the truth, and there was no problem at all with getting in. When you start looking at apartments, be up front with them about what’s on there and why it’s on there. I think that your good history should balance out his bad credit, but I’m not sure how they look at it in a situation like that.
This is close to what I had intended. While trust is a wonderful thing, I’m guessing he trusted his parents, too.
My point is that he can rebuid his credit without putting her credit at risk. Trust or not, why push it if it’s not necessary.
I have worked for AMEX, a sub-prime credit card company, and a student loan origination company, so am familiar with both sides of the credit coin.
PLG, my boyfriend had pretty bad credit (thanks to his ex’s credit card habits) and he was able to buy a house! He worked very hard for a couple of months to get all the bad marks cleared from his credit record, but in the end it was worth it. I think the part in Handy’s advice that is true: Don’t pay a company who promises to “fix your credit rating”. You can do it yourself, and most of those companies are rip-offs. Don’t worry, I’m sure everything will work out fine for you two.
One thing to remember is that you can’t remove a legitimate “bad mark” from your credit report. If the report is in error, the credit reporting company (such as Experian) can remove it; but if it is not in error, then they cannot.
Also: Someone reports to the credit reporting company that you are slow to pay, defaulted on a loan, etc. and they are in error, be sure to contact that company to have it fixed on their end. Businesses tend to report their accounts receivable every month. You may have an erroneous entry cleared one month, only to have it reappear because the lender reports it again the following month.
If you think you have erroneous entries on your report, get a copy of the report. Experian charges $8.50, but you can get a free one if you are denied credit based on an Experian report a creditor receives. Go through the report and find any entries that don’t belong there and have the reporting company clear them. Then call the company who sent the entry to the credit reporting company and have them correct their data. This will help to ensure that they don’t make the same mistake the next time they send in data.
Pay the balance on every credit card in full every month.
Never carry a balance on any credit card. If you pay it off every month, you are getting what amounts to a short-term, interest-free loan from the credit card company. If you don’t, slavery is not dead.
If you cannot afford to pay off the balance for what you bought, you have bought something that you cannot afford.
Never borrow money to buy a depreciating asset. It makes no economic sense.
If you pay off your balance every month, the credit card companies will hate you. The mortgage lendors, however, will love you. Then, when you borrow to buy a non-depreciating asset (like a house), you come out waaaaay ahead.
Credit is a tool to be used in budgeting. It is emphatically not something for nothing.
Regards,
Shodan
I disagree with some of the above, particularly the bit about how “mortgage lenders will love you.” It presupposes that mortgage lenders are a completely separate market from credit card companies, and have completely different, even contradictory incentives. At one time (say, prior to the S & L crisis) that may have been the case, but ever since the development of highly efficient secondary credit markets (um, I’m already getting into too much detail - don’t ask) there’s less difference then one would think.
Many mortgage lenders now like to see that someone manages credit well, and managing it well can include carrying a balance. Some mortgagees in fact prefer to see that a candidate has actually a record of using credit and paying it off over time, since it approximates the experience of a home mortgage.
It’s a key balancing act. Shodan’s right in that it’s very easy to go over the line and get in too deep - but when you’ve got a good job and a steady income, making longer-term purchases (furniture, for example, or office equipment) using credit can make sense and won’t get you in trouble. The keys: (a) know that you’re taking out a short-term loan, (b) have a definite, readily achievable mental schedule for paying it off (and do so!), and © don’t use credit for day-to-day expenses, like restaurant meals, etc. Your mortgagee will smile on you.
I don’t agree that if you can’t afford to pay cash you are buying something you can’t afford. I buy all my oil for the heating season every August and charge it to a credit card because it’s cheaper than the alternatives. I get a zillion credit card offers every month, so close to August I pick the best one. Last year I got 6 months of no interest. I pay the CC company instead of the oil company every month and I get the August price, so I still come out ahead. The best way of course would be to have the $1600.00 cash, but sad to say, I don’t. If I could afford a double payment, I could save ahead, but my budget doesn’t permit it, so this is a good alternative.