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3 Bumps

where to start?

im deeply in debt. but im not 100% sure how much.. i had a forclouser in late 2006 or early 2007, 3 credit cards and numerous medical bills. i havent worked in 4.5 years and havent even started paying those things off, i was a young mother and we were barley making it as it was.. now that im going back to work soon and we have a better income id like to start paying down my debt, what are some ways to start that and also raise my credit score?

we are wanting to buy a house and land soon too. should we pick whos credit is the easiest and fix that quick for the house? or wait longer and continue to rent even though we have out grown this place and are miserable?

Answer Question
 
2boysmommy.js

Asked by 2boysmommy.js at 9:52 PM on Jan. 2, 2011 in Money & Work

Level 17 (3,365 Credits)
Answers (9)
  • I would call each credit company talk to them and see what they can do. You are going to have to wait either way. I would find a house to rent with an option to buy. Then you could do both.
    DevilInPigtails

    Answer by DevilInPigtails at 10:28 PM on Jan. 2, 2011

  • but how do i get the names of the credit companys? we are very leery of renting from ppl again< now its an apartment> becasue we got screwed major a little over 2 years ago doing rent with option to buy...
    2boysmommy.js

    Comment by 2boysmommy.js (original poster) at 10:33 PM on Jan. 2, 2011

  • Pull your credit report to find out what outstanding debt you have.
    Make a list of your debt from smallest to largest and how much you owe to each. If anything is in collections or behind (like utilities), start there first.
    Work out a budget and anything extra you have, throw to the smallest debt (making minimum payments on everything else that has min payments). Once you have that one paid, throw everything you have to the next smallest debt.
    SherriPie

    Answer by SherriPie at 10:34 PM on Jan. 2, 2011

  • i forgot the second part, I would continue to rent until can get your debt paid off. You might switch to a different apartment, but buying a house is going to be very expensive. Most lenders won't loan you money unless you have decent/good credit (for about 2 years) and consistent employment for about the same.
    SherriPie

    Answer by SherriPie at 10:36 PM on Jan. 2, 2011

  • my S/O has decent credit.. his is about a 6.5 right now... but he is self employed...and has been for 6 years
    2boysmommy.js

    Comment by 2boysmommy.js (original poster) at 11:01 PM on Jan. 2, 2011

  • I agree with Sherri-
    Get a copy of your credit report (annualcreditreport.com)
    It should give you a list of all your debts as well as who currently owns then.

    Get on a written budget where every dollar has a 'name'. That way when you or your husband gets paid you know exactly where the money is going. Make sure both you and your spouse agree on the budget before the month begins.

    Say your smallest debt is $1000, save up $500 and call that company and see if they'll accept that as payment in full. Get it in writing, no electronic access to your checking account. Then send them a cashiers check, certified mail, and viola your debt is settled. If they don't accept $500, save up more and then the next month call them back and see if they'll take that amount.

    Don't call more than one company at once. You're basically waking up sleeping dogs. They will get feisty.

    I would also recommend Dave Ramsey's book Total Money Makeover.
    Erica_Smerica

    Answer by Erica_Smerica at 12:29 AM on Jan. 3, 2011

  • Continue:
    I would wait until your debts have been paid off and you have a six month emergency fund before looking at buying a home. If you only clean up one credit report, then it's highly likely that only that person will be able to get a loan. Which could mean a smaller home and/or worse terms on the loan.

    Also if you don't have an emergency fund, your basically asking Murphy to move in with you. You probably know from first hand experience how dangerous it is to buy a home when you're not ready. Life happens, job loss, job relocation, unexpected pregnancies, home repair etc. Being debt free and having a six month emergency fund will help you get through life's little bumps!

    Good luck!
    Erica_Smerica

    Answer by Erica_Smerica at 12:32 AM on Jan. 3, 2011

  • Call a Debt Consolidation place they will pull all the reports for you and get what you owe dropped lower and put all your payments into 1 monthly payment....They work great
    Mrs.Norris

    Answer by Mrs.Norris at 2:34 AM on Jan. 3, 2011

  • As far as paying off your debt... Have you ever thought about working from home to make some extra money? I work from home and I love it! I am a stay at home Mommy to my 3 ½ year old son, and 22 month old daughter. I work with a great team of Moms; we help each other create income from home. No parties, No inventory! Free website, training, and unlimited support!!
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    Erika
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    I honestly think that you should pay off your debt before you buy a new place, and save some money as well. You'll feel much better having money saved when you're buying a place. In the meantime you can work on fixing your credit too.

    Best Wishes!
    mommy2joeynabby

    Answer by mommy2joeynabby at 2:47 AM on Jan. 3, 2011

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