I'm recently divorced, and have lots of student loan debt, how can I clean up my credit?

Answer 1

My wife had bad credit when we got married. Her credit was ruined from a previous marriage. What we did to improve her credit, was to get any credit card for her we could, regardless of the intrest rate. We got offers for very high highest rates. Take the first offer you get. Then, use your credit card to make a very small purchase of say, $20. When you get your credit card statement, pay off the full amount. Then make another small purchase of the same small amount, then when you get your bill, pay it off in full. As you do this, over time your credit score goes up. Eventually after a year or 2, check you credit score for free. Do not use freecreditreport.com, it is not free if you want detailed info. Use this GOVERNMENT WEBSITE: http://www.ftc.gov/bcp/conline/pubs/credit/freereports.htm

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – to provide you with a free copy of your credit report, at your request, once every 12 months

Other websites that claim to offer “free credit reports,” “free credit scores,” or “free credit monitoring” are not part of the legally mandated free annual credit report program. In some cases, the “free” product comes with strings attached. For example, some sites sign you up for a supposedly “free” service that converts to one you have to pay for after a trial period. If you don’t cancel during the trial period, you may be unwittingly agreeing to let the company start charging fees to your credit card.

Some “imposter” sites use terms like “free report” in their names; others have URLs that purposely misspell annualcreditreport.com in the hope that you will mistype the name of the official site. Some of these “imposter” sites direct you to other sites that try to sell you something or collect your personal information.

Once your credit score is 700 or above which make take a year or two, make sure your new credit card with the high rate is paid off, then cancel it, wait a week or two, then apply for a VISA OR MASTERCARD w/ a %9 rate or lower. Continue to make small purchases and pay off the full amount each month. My wife did this for about 2 years and now has a credit score near 800.

There is no quick short term solution without putting yourself in further debt with a debt consolidation company such as ditech.com and others that says they will get you out of debt, or without claiming bankruptcy.

Because her score is now near 800, this allows her to easily apply for credit cards, bank loans, car loans, a mortgage loan, ect. Once a year, check you credit at the above website, and report any inaccuracies IMMEDIATELY to the ctredit agency that has the error. it will be Equifax, Experian, and TransUnion, or which ever one is reporting the error or mistake you find.

If you think this information is helpful, please rate my answer as the BEST ANSWER, so I can get some points. Thanks!!! Good luck.

Answer 2

The key to improving your credit score is planning. It's comprised of a lot of different things-- including late and on-time payments, defaults, available credit, job record, taxes owed, leins, bankrupticies, etc, and something called your debt-to-income ratio that indicates how much you pay out each month vs. how much you get paid.

For any other debt, first request a copy of your credit report from Equifax. (Don't use one of those free- on-line scams-- you want your full report with credit score.) That way you'll know where you stand. Analyze it and make sure it's accurate. Then, start plugging away at your debt. Reducing debt is the best way to improve your score.

You may be able to re-finance your student loans for a longer period of time and lower your payments so you can manage them each month. That will help...

Also, keep at least one credit card that you pay off every month-- no matter what. If you do this for at least a year, that will really help your score-- a good history of on-time payments. If you can't get a regular credit card, you can get a secured card and then treat it like a regular card--- with 100% on-time payment. This way you improve your credit score. Any other cards, make sure that they are not maxed out or even close... you shouldn't use more than 50% of your credit limit.

Develop an aggressive plan for paying off any other credit card type debt-- maybe even take out a consolidation loan. And, get rid of most of your cards, especially the department store cards. Your credit is also impacted by the amount of cards you have-- fewer is better than a lot. Creditors look at how much you'd be able to charge if you wanted to, so all those open accounts that you don't even use hurt you too.

Best of luck!

Answer 3

First,
1.do some research on best place to re-finance with at lowest rate.
2. keep your monthly expenses low with an effort to slow down growing debt..
3. Ignore pride and try find a family memeber who may give you a low interest loan with a little family contract, while you plan to repay the debt each month like a clock. Family member who may not get a high % on his/her money, and trusts you will become a good lander and create a "win win" situation.
4. believe in yourself and plan a time limit by when you'll pay off the debt. (try be rational about it, but do set a real goal)
5. make sure you do not pay an late fees and penalties on credit cards or other - that's where lots of your money may go to.
6. believe in yourself - you can do it!
7. good luck!

Answer 4

Have you considered debt consolidation? I'm going through a debt consolidation company right now. They negotiate interest rates with my credit cards to lower my monthly payments. They take out so much out of my bank account every month and they pay my debt for me. I'm supposed to be debt free in 48 months.

Answer 5

If you're like me, you have a large student loan debt, but are paying a relatively low interest rate. Put more energy in getting your higher interest debts payed off, like credit cards.

Answer 6

yea get a loan and start to pay it back. or just wait tell you can. it is very hard, they will hit you with a high interest rate. but that's what we have to do. I had to do it after a bankruptcy 8 years ago. it sucks but it also worked. The lawyer told me wait about 1 yeas buy a cheap car and pay the high rate, and do not make any payments late. he said it was the fasts way to fix it. I did that its all good now. I did mine right after a divorce too. good luck.

Answer 7

Unfortunately you are liable to pay your share of the student loan. Even worse, the whole thing if she defaults. Unless, it is stated in the divorce papers that you are not responsible for the loan. Even if this is so, your name is still in ink on those financial papers. It doesn't matter why you cosigned on the loan, the bank doesn't care. If she doesn't make the payments, the bank has someone else to go after. YOU.

Answer 8

If you have any credit cards that you are on good terms with (as in up to date) keep them active and paid off. One big mistake people make is closing all their good accounts when they are having a credit problem. If you can afford it, one of those credit clean up places can tell you if you have any erroneous or bad information on one of your credit reports. If not, you can request a credit report on your own from each of the credit bureaus (Transunion, Equifax, Experian) and dispute any incorrect information.

Answer 9

Starting a budget is absolutely essential. That will tell you were your money is going. Then you just have to make sure that you spend less than you make. It takes discipline but is well worth it. A great book that will help you do this step by step is called the Total Money Makeover by Dave Ramsey.

Answer 10

workout a budget set aside money for bils and the things u absolloutly need then set aside about 50 bucks a month to get yourself something nice.with the rest use it to clean up ur credit.