So stoked! Finally was able to pay off 2 more collection accounts!

[FirstLight]

Im trying to get my credit score up. Never really cared about it much before. But since I seem to be "adulting" more this year, I figured I'd get it rolling.

Used Credit Karma to start fixing things, got a regular credit card and paid it off each month the past 3 months, so that started to turn things around.
Now I just called 2 places that have been after me for a couple years and just BAM! paid off that shiiite!

By next month, maybe I'll be able to actually take out a home equity loan and make payments. Im just so stoked...Finally have a stable home and job situation and I think I can adult reasonably...It only took me 50 years!

[msongs]

1. most collections accounts show up on credit score for 7 yrs or so. well done nt

[lapfog_1]

2. first suggestion for being an adult

is don't use "adult" or "adulting" as a verb.

Pet Peeve of mine when around the 20 to 30 year olds.

[FirstLight]

5. heehee...It fits though...

I may have been a "grown-up" and raised 3 kids alone...but this is the most ADULT I have been in my life

[SmittyWerben]

3. If you paid off a debt smaller than owed

Be aware the debt holder may resell the unpaid debt to another collection agency or, 1099 you for the unpaid debt as income for tax purposes.

[Demovictory9]

4. get confirmation of pay off in writing and keep forever. those debts get sold and others try to

collect what's already paid off. next step in "adulting"

congrats.

[Hoyt]

7. Very true. I paid off late FIL's credit card debt, a few thousand. 10 years later, we went to sell

his small house.

The damn credit card company had not removed the lien, so I had to pay it again since I didn't have proof I had paid it off. Might could have found paperwork, etc., if I had time. But it was like we have to do this today or buyer is out.

Also had a medical bill that I paid. Like you said, the debt had been sold before I paid it off. Years later, the purchaser of the debt tried to collect again. I went to court on that one and won.

[Demovictory9]

8. omg. :-( save two hard copies, and email yourself a copy. I write "KEEP FOR EVER" on documents

like payoffs so I don't accidently delete or toss..

[Johnny2X2X]

6. Debt is bad

You're making some smart choices, congrats!

I've come from a similar spot. Had a mess of collections, student loans, etc etc. Took a long time to get my head above water,

With interest rates being so low and home values so high, a refinance is not a bad idea right now, but make sure you have a trusted mortgage broker who will give you the details all up front. I recently refinanced, and it was a no brainer, home went up in value so I got rid of PMI (mortgage insurance) because my owe to value ratio came in under 80%, got a better interest rate, went from 4.25 to 3.25. And I threw in a couple credit cards. So my mortgage payment went down $300 a month and I got rid of the last of my credit card debt that I was paying $300 a month on. $600 a month in the black on the deal made it a no brainer. And I still have like $90K of equity in my home based on its current value.

When you get out of debt, the most important thing is to build a good emergency fund so the next emergency you won't go right back into debt. Credit Card debt just makes you feel hopeless, it never goes down and one bad month can get it way back up there so you get stuck paying indefinitely. If you're left with some CC debt still, once your credit gets better, your CC companies will send you 0% balance transfer options. Transfer debt to that card and pay 0% interest on it for a period, when that runs out look for another 0% transfer offer. My wife has some cards that she transferred to 1 and is paying 0% interest for 36 months, she's on track to pay it all off well before 36 months expire.

[FirstLight]

9. thanks for the advice.

I'm lucky enough that my house is paid for, so if I need to tap the equity for home improvements, etc i can get a lower payment. Also, since I bank LOCALLY my small bank can personalize things better and give me a better deal...

I freaking need a car too...but right now it is just TOO much even for a used POS

[Wounded Bear]

10. Good job! The collections morass can be nearly impossible to scratch out of...

[FirstLight]

11. ya...there's still ONE left and I can locate the creditor or account holder.

At&T...then a collection agency...then they said to call Verizon...

Hell, I dont even KNOW where this one came from!

[patphil]

12. I refinanced my house and took out about $40,000 in equity.

I used it to drastically reduce my credit card debt, and make home improvements.
My credit score is the highest it's been in over a decade, and, because of the lower interest rate, I pay a few dollars a month less on my mortgage.

Because of the pandemic, my house went up almost $100,000 in value, but, because of the pandemic I took on a lot of credit card debt.
Pulling out equity was the right choice for me. Look into it, it may work for you.

[FirstLight]

15. Nice...

Ya, I wanna use home equity to deal with remodeling, plan on making improvements to my family's old cabin, my dad built it in 1960 and the plumbing is not up to speed. He's not able to do the upkeep anymore so I just wanna help and fix what I can...

[secondwind]

13. That must feel SOOO good!

Congrats!!!

[The Mouth]

14. One trick that can work

Pay off your credit card a few days before it's due. The ratio of amount of your balance to the amount of your credit is a big factor.

PS - Good Work!!!

[FirstLight]

16. yep...I have been doing it for the past 3 paymts on the new card.

I'm trying

[3Hotdogs]

17. Borrowing money to pay debt.... not the worst idea.

Still, avoid the feeling that you lowered the amount of your debt. You didn't.

Don't be tempted to then pick up the credit card to buy something else because your monthly payments are now lower.

The goal is to get rid of ALL debt.

[FirstLight]

18. Well I didnt borrow to npay down the old debt, so that's good....

Now it's just a matter of building on the ZERO balances ...been on the wrong side of that for ages!

[NurseJackie]

19. Congratulations!

[ananda]

20. Congrats!

Well done.

[forgotmylogin]

21. Be aware - if a creditor "forgives" some of your debt you will be taxed on it!

Debt forgiveness gets reported to the IRS as income. Make sure you get a tax form for it and account for it on your 1040.

I had to pay about $600 back because I didn't know about this.

And congrats! I got out from about 65k of long-term credit card debt via consolidation and settlement a couple years ago.

[FirstLight]

22. I wasn't forgiven for shit! lol

Just paid those balances off and got it DONE! Like ripping off a band-aid...but damn

[forgotmylogin]

23. Good deal!

[MontanaMama]

24. Keep it up!

Good credit is power. I’m proud of you! Well done.

[hunter]

25. My personal adventures in credit began when I took a VISA card into an Emergency Room.

Foolish self thought we had good insurance.

Those debts are long settled, but ever since I throw credit card offers into the shredder.

Frankly, I no longer give a damn.

In the civilized world outside the U.S.A. bankruptcy for medical debts is almost unheard of.

[IrishEyes]

26. Congratulations! I finally paid all of my debt off this year.

I enjoyed each time that I paid off a credit card. It is also fun to watch your credit score go up.

[3Hotdogs]

27. Two books may be of interest to you.

Your Money or Your Life by Robbins and Domnquez. You may not want to follow the advice of where to put the money you saved. An index fund by Vanguard would be better.

And

Dave Ramsey's Total Money Makeover.. You may choose to ignore the religious points he makes. However, the financalmessage is sound. Or you may find his podcast on Youtube.



Here's to success in your endeavor.


3H