Frugal Village Forums banner
1 - 14 of 14 Posts

·
Registered
Joined
·
352 Posts
Discussion Starter · #1 ·
Our history is a bankruptcy in 2005, followed by a major job loss/income crisis and medical crisis which resulted in more consumer debt. Everything went to collections and last year we made settlements for all but about $3000 medical that we still have left to pay (and intend to do this year). We've paid off a ton and our credit score has gone up 10 points in a year- that's it. We do not own a home. We don't have credit cards. How can we raise our credit score?
 

·
Registered
Joined
·
8,566 Posts
Two things.

Time.

Go deeply into debt and keep your payments current.

I do not recommend the latter. You have lived first hand through just how wonderful debt can be. Why would you want to go back into it?

I know, SOME things can cost more with a poor score - IMO so what. Cope with that and stay OUT OF DEBT.
 

·
Registered
Joined
·
57 Posts
Well, I was in a similar position in a year ago, and I have raised my credit score almost 100 points. I got a new CC, not a high limit, but I use it to buy things off line when I rather not risk my debit card information. I keep it current and haven't had any issues. That coupled with getting items removed from my credit report have helped me.
 

·
Registered
Joined
·
8,566 Posts
Well, I was in a similar position in a year ago, and I have raised my credit score almost 100 points. I got a new CC, not a high limit, but I use it to buy things off line when I rather not risk my debit card information. I keep it current and haven't had any issues. That coupled with getting items removed from my credit report have helped me.
When you say "getting items removed" - I assume you mean they were items that actually didn't belong there?
 

·
Registered
Joined
·
344 Posts
We had a problem of ours going down because we don't use debt! So, we took my car and took out a small loan on it about two years ago. The loan was for 3 years (the smallest loan they had at the time) and we paid it off at the 6 month mark. Raised our score 70 points. Even though we live debt free we HAVE to keep my husbands score up because his job requires clearences. Plus, we will have to have a mortage one day unless we wait to buy until we're 80 and then we have wasted money renting... Trying to keep it over 800 until we buy a house. Good luck.
 

·
Registered
Joined
·
8,566 Posts
We had a problem of ours going down because we don't use debt! So, we took my car and took out a small loan on it about two years ago. The loan was for 3 years (the smallest loan they had at the time) and we paid it off at the 6 month mark. Raised our score 70 points. Even though we live debt free we HAVE to keep my husbands score up because his job requires clearences. Plus, we will have to have a mortage one day unless we wait to buy until we're 80 and then we have wasted money renting... Trying to keep it over 800 until we buy a house. Good luck.
Clearances will not be jeopardized by you having a low credit score because you are responsible with money. Clearances care about your credit HISTORY.

Clearances are concerned with things that make you a risk to national security - such as large debts, bankruptcies, etc. Cases where foreign money would be more likely to be tempting.

As for a mortgage - anything over about 720 is usually going to get you the best rate you can get w/o paying for it. Ask your banker for details.
 

·
Registered
Joined
·
2,375 Posts
The people who handle our security clearances look at more than just irresponsibility. They look for any indication of money that you shouldn't have. If you pay down your debt very quickly or, say, use cash to pay for a house, you could have to explain yourself down the road. I've had to interview with our investigative services before when a friend was getting a clearance, and they ask about these things. It shouldn't be a problem with a good paper trail, but still all things being equal I'd prefer not to get investigate for possibly selling secrets.

I don't know exactly what the inner workings of the system are, but I can see being off the credit grid can cause you problems in the future. I don't know about your credit score, though. I don't think they look at that.

As far as OP, not having a credit card is hurting your score. And that's fine, if you are okay with the hit you're taking, but I assume that you're not since your score bothers you. If I were you, I'd get one credit card and put a recurring bill on it, like netflix maybe. Then shred the card and pay off your bill monthly.

You should also have one installment loan, if you don't have one already. You don't have to go into mad debt to fix your credit, just get a personal loan for like 500 or maybe a car loan. (I'd wait until you pay off your final 3k though.)

For the other stuff, there's really not much you can do until it drops off. The bankruptcy and settling for less than you owe are both going to hurt you and I'm not sure you can do much more than wait it out.

I know saying that you need a loan and a credit card is kind of blasphemous here, but you asked how to raise your credit score and you can't really do that without either paying things down, taking on debt or letting things fall off. Your options are kind of limited in your situation.
 

·
Registered
Joined
·
715 Posts
I have a lot to learn about mortgages since I have never applied for one but according the Google mortgage calculator, the excellent range is 740-850.
 

·
Registered
Joined
·
2,375 Posts
My bank says 740 also, but I assume that varies. I think the other bank I use says 720.
 

·
Registered
Joined
·
8,566 Posts
It may be 740 - it's been a year since my last mortgage application.
 

·
Registered
Joined
·
12,986 Posts
Clearances are concerned with things that make you a risk to national security - such as large debts, bankruptcies, etc. Cases where foreign money would be more likely to be tempting.

Depends on the job..........and the clearance........they do watch for 'bad traits' (IE: drinking, etc.) for the obvious reasons........and not all are because of money.

I was interviewed about a co-worker that was an alcoholic........had NOTHING to do with money..........but she was 'monitoring' for radiation.......might be nice if she could READ the equipment when they came out of the radiation.
 

·
Registered
Joined
·
352 Posts
Discussion Starter · #12 ·
We do want to raise our credit score. Our financial situation has changed significantly over the past few years and we are almost in a position where we could buy another home (we sold one in 2006 and took the profit to pay down debt)- we'd like to buy again in another year if we can save up a large enough chunk and pay down this last medical bill. It is looking promising, but we need to get our credit score up too. If it takes even 2 years that is fine, but just want it to at some point. We have no car loans or anything. I guess maybe getting a very low limit credit card and using it for something specific does make sense. We rent a home from a relative and have considered asking them to report our timely payments to a credit bureau, but not even sure how to go about doing that.
 

·
Registered
Joined
·
715 Posts
Since sadly I have carried a balance as long as I've had credit, I have never been 100% sure if paying a CC in full every month helps your credit? I don't plan on doing this myself, as I am a devout Dave Ramsey follower (may even name my first child after him lol) but does it help your credit score? If it does, why would someone take out a small personal loan and pay it back?
 
1 - 14 of 14 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top