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I really messed up my credit


disney
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After discovering this board and purchasing my first home I was able to increase my FICO from 620 to 742. I only had one major credit card and of course when my credit started to get better I began to apply for more credit cards. I now have every major credit card and a couple of dept store cards and I am in major debt. I messed up my credit because I am to the limit on almost all of them. I have never made a late payment on any of them but my FICO has now gone done to 615. This is totally due to my over usage of my cards. I only have 3 major cards that I have not used but I don't even know how long that will last since I basically use my paycheck to pay the credit card bills but I use the credit cards to survive. This is one vicious cycle that I have put myself in. I really don't want to go to the credit couseling or file bankruptcy because I don't want to make my credit any worse. Even though I am barely surviving here I made a vow that I would never make a late payment again on anything and I have been very successful in doing that over the last several years. I have read the Suzy Orman and Dave Ramsey books to also seek some advice. Does anyone have any advise for me?

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I have read the Suzy Orman and Dave Ramsey books to also seek some advice. Does anyone have any advise for me?

I am a big Dave Ramsey fan, and have been following his advice for some time. The problem is when you have over-extended yourself on several cards, making minimum payments never let you get out of debt.

The point of Dave Ramsey and Suzy Orman's philosoplly is to get rid of one debt at a time. Easier said than done, I know, but you have to stop using the cards...first and foremost. Put them away, get them out of reach, or cut them up if you have to...but don't close the account and don't use the cards. There's no way to get out of debt as long as you continue to charge.

Here's the simplified version of what I did...I never pay minimun on any card, but if you have to, fine. Figure out which card had the lowest amount owing on it, and pay 2 to 3 times the minimum payment each month on THAT card, and keep your current payments current on the other cards as well. Pretty soon, you'll start seeing the balance on that one card start to go down, and when it does, it will encourage you to continue until it is paid in full. Then work on the next card the same way.

I hate to even suggest it, but if things are this desperate, have you considered a second job temporarily? If you could make, for example, $500 a month part time, and dedicate that money to pay off a debt, in 3 months, you could eliminate a $1,500 credit card.

The biggest thing is to remain calm, address the issue in a level headed manner. Don't start using the other cards to save yourself, because all you will wind up doing is making matters worse by adding another bill to your already over-extended debt. Do not consider refi on your home to pay off the debt because then you have traded unsecured debt with secured debt, and could place your home in jeopardy if ytou can no longer pay.

I hope I don't sound like I'm preaching, cause I'm not. I've been there........

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I'm a big fan of Dave R. and Suze Orman, I watch her show all the time. However, debt is usually just the symptom of a problem, it's not the problem itself. Paying off debt is important but looking at why and how you got there is just as important.

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However, debt is usually just the symptom of a problem, it's not the problem itself. I can almost guarantee you that someone who has $10,000 or $20,000 in credit card debt, even if they pay it off, will get into the same situation again in 1-5 years. Why? Because paying off debt is not dealing with the root of the problem.

Paying off debt is important but looking at why and how you got there is just as important.

Oh I agree! Have a friend who filed BK approximately 18 years ago...finally got out from under that on her CR, bought herself a house. Three years later, she's taking out a 2nd mortgage to pay off the CC debt (got her credit in good shape and then applied for every card in the book). Now, 9 years after purchasing her first home, she has 2 mortgages, and is over $15,000 in CC debt again...and has 2 car notes...wouldn't listen to me, but went the CCCS route. Her problem is uncontrolled spending.

I think we have all been at that point some time in our lives...some of us take control and learn from our mistakes...some don't. There is no quick fix, and if the spending habits are obsessive, then perhaps finding other type of help is also needed.

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disney,

another thought...get a part time job and dedicate that to paying off your CC bills.

I know that credit score improvement can be tempting.....

I just improved my TU and EX score to over 650. There are things I want and there are things I 'need' (eventually). It was so tempting to go out on get more credit. Also, Target Visa just increase my CL to $5000 from $500! I so thought about using it!

What stopped me was my BF. While he was in Iraq, I spent those 15 mo working on his CR. When he got home, his scores were upper 600's. In just 4 months, he added $74K to his debt! (A new Toyota Highlander, a Honda VTX 1800 motorcycle, 2 Jet skis and a bunch of new CCs that he maxed out.) He then took a $15K second on his house to pay off the CCs and then went right back out and maxed them again. :shock:

Currently, since he is in the National Guard full time, he is living in the Armory to have negligible living expenses so that he can now pay for all of this! (BTW, the house he got the 2nd on is uninhabitable. It was broken into while he was in Iraq. With the broken windows and open door, he now has mold and mildew all throughout the house. The insurance co declined coverage saying that it was "abandoned" while he was in Iraq! Last month the sheriff called him and said that BF should seriously not consider pursuing the criminal complaint. Seems the vandal/thief was his then-wife (now EX)!!!! {When he left for Iraq, she moved out of the 'family' home, took $35K of 'their' money and bought herself a brand new TH that she did not put him on the title!} She has custody of his kids. He 'cannot' take the kids because of his deployment status.)

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disney,

another thought...get a part time job and dedicate that to paying off your CC bills.

I know that credit score improvement can be tempting.....

I just improved my TU and EX score to over 650. There are things I want and there are things I 'need' (eventually). It was so tempting to go out on get more credit. Also, Target Visa just increase my CL to $5000 from $500! I so thought about using it!

What stopped me was my BF. While he was in Iraq, I spent those 15 mo working on his CR. When he got home, his scores were upper 600's. In just 4 months, he added $74K to his debt! (A new Toyota Highlander, a Honda VTX 1800 motorcycle, 2 Jet skis and a bunch of new CCs that he maxed out.) He then took a $15K second on his house to pay off the CCs and then went right back out and maxed them again. :shock:

Currently, since he is in the National Guard full time, he is living in the Armory to have negligible living expenses so that he can now pay for all of this! (BTW, the house he got the 2nd on is uninhabitable. It was broken into while he was in Iraq. With the broken windows and open door, he now has mold and mildew all throughout the house. The insurance co declined coverage saying that it was "abandoned" while he was in Iraq! Last month the sheriff called him and said that BF should seriously not consider pursuing the criminal complaint. Seems the vandal/thief was his then-wife (now EX)!!!! {When he left for Iraq, she moved out of the 'family' home, took $35K of 'their' money and bought herself a brand new TH that she did not put him on the title!} She has custody of his kids. He 'cannot' take the kids because of his deployment status.)

I would love to be able to get a part time job but I am a single parent with a small child. My son already spends his days in daycare and I don't want to have to take him to another in the evenings and weekends.

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