Debt FREE!!! Now What????

[clevername2000 10]

Like the title says i am FINALLY debt free! Absolutely 0 debts!

I am as they say literally "broke".

So now what, i have bad credit and in about 5 years would like to buy a house and of course new cars.

[whocares 1,184]

Start saving your money...

[clevername2000 10]

Start saving your money...

Excellent, great advise! I never thought about that, seems so simple now!

[willingtocope 1,336]

Even if you're debt free, you probably still have a credit history, unless you've never had credit. History gets better with age...even bad history.

If you need a new car, you can probably get one now. Put some money down if you can.

If you plan on buying a house in 5 years, avoid CC debt. (Yes, "utilization" helps your FICO CC sucker score, but, having no revolving credit is better for your FICO mortgage score). Put what money you can into a saving account for a down payment. Nothing helps get a mortgage like having a sizable down payment.

[clevername2000 10]

Even if you're debt free, you probably still have a credit history, unless you've never had credit. History gets better with age...even bad history.

If you need a new car, you can probably get one now. Put some money down if you can.

If you plan on buying a house in 5 years, avoid CC debt. (Yes, "utilization" helps your FICO CC sucker score, but, having no revolving credit is better for your FICO mortgage score). Put what money you can into a saving account for a down payment. Nothing helps get a mortgage like having a sizable down payment.

Thanks so much, this is what i was looking for. So there is no real direct way to turn bad credit into good (other then age)?

Along time ago i have made a plan to stop spending and start saving so putting a down payment is not a problem.

[willingtocope 1,336]

The real problem is...there is no single measure of "good credit". If you're looking for a mortgage in 5 years, then your FICO mortgage score will be improved by having a hefty down payment, and NO revolving credit. The FICO new car score depends mostly on your history of handling car loans in the past...the farther in the past that bad news goes, the better. The FICO sucker score for getting new credit cards does depend, somewhat, on "utilization", but, in general, having one or two open accounts for emergencies is really all you should strive for.

[creditreformer 128]

congrats, save, save, save, and save some more. if you take on new credit, use it wisely- keep utilization low, pay in full, avoid late/overlimit/etc. fees. do whatever you can to avoid mucking up your credit again.

as for old negatives, time helps to lessen their impact. most drop off @ 7.5 yrs, but sometimes some will drop off early. others (like tax liens and student loans) can linger on much longer depending on whether they're paid or unpaid. ex., unpaid tax liens remain for 15 yrs. defaulted student loans sometimes drop off @ 7.5 yrs, but other times, they remain on for an indefinite time. sometimes old negatives will drop and then reappear...i can't stress the importance of keeping your old credit reports.

if you have chargeoffs/lates, perhaps you can get the cos. to agree to remove them from your reports on a goodwill basis- or at least report 'paid in full' to lessen the brunt. success on this is mixed though.

[clevername2000 10]

Well this is all encouraging. It sounds like im on the right path and need to just stick the course.

[MaxedOut 58]

if you have chargeoffs/lates, perhaps you can get the cos. to agree to remove them from your reports on a goodwill basis

Excellent advice. Put your effort towards getting the negatives removed and keep at it until they are gone or drop off your report. Don't get discouraged when they tell you they can't or won't remove it, just brush it off and give it another shot a couple months later.

I also suggest getting at least 1 credit card and a secured loan (unsecured if possible, but secured if not) from a local credit union that you are sure reports to all 3 bureaus. Having no credit at all can be just as bad as having bad credit, believe me. I got my report wiped totally clean last year, no good or bad items on it (see sig) and I REALLY wish I would had started building credit while I was repairing it. That would have given me 6 months to a year boost in good credit right off the bat. Live and learn I guess.

Good Luck!

[clevername2000 10]

Good advise, i currently have major credit card and have been paying it off in full every month for sometime.

[dp001 10]

Thanks so much, this is what i was looking for. So there is no real direct way to turn bad credit into good (other then age)?

Along time ago i have made a plan to stop spending and start saving so putting a down payment is not a problem.

Sure their is a way to turn bad credit into better credit without time. Yes time is important, but really if you need credit do you really have 7-10 years for this stuff to fall off your credit report, I woulden't wait. I would pull my credit report which is free at freeannualcreditreport.com, then I would start disputing the " in accurate " stuff like everything, but not all at one time. There is a guide on this site that can help. Just remember to send your disputes certified mail!! This link will help

http://www.creditinfocenter.com/repair/Repair.shtml

[AboveAverage 779]

I hope I'm not hijacking the thread, but this has actually been on my mind for sometime. I devoted enough of my refund to pay off all the "new" debt (and by "new" debt, I mean the credit card purchases I made when I started my credit repair. It felt good to pay for stuff in cash again as opposed to PIFing and starting again.

I now just want to use my BOA secured card to pay the DF's cell bill and the cable bill. And then PIF that at the end of the month. That's about $220 out of $1000

The HSBC will have just the CIP, TU, and Pet Insurance which comes out to roughly $76 a month out $500.

I guess my question is should I even bother with this exercise OR would I be better off making no purchases unless a true emergency comes up? I have never had a finance charge and don't plan on it. I really just want a mortgage in 2-3 years and I'm just a bit confused right now. While it would be nice, I probably don't need $50-$100k of revolving credit like I thought I did. The only "new" debt I have is my car, and I plan on getting rid of that within 2 years...2.5 tops.