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QUOTE::::[ Rent: $800 - course I guess I could move back home but then I'd have a skip on my credit.
Car Payment: $210 - course I guess I could give my car back but then I'd have a repossesion on my credit.
Car insurance: $90 - course I guess I could drive without insurance, but then my license would get suspended.
Lights: $110 - course I guess I could sit in the dark but they would probably report me to child services.
Water: $50 - ditto from above
Phone/Cable/Internet Combo: $150 - course guess I could do without but how would I job hunt without internet & how would they call me if I had no phone?
Gas for my car: $200 - course I guess I could catch the bus - might be a little harder to get to interviews but oh the money I'd save.
Daycare for 4 weeks: $600 - course I guess I could leave him alone by himself.
END QUOTE.....
Drop the internet and use the public library. (I saved you 50 bucks a month)
I've used the bus system in Orlando and if you trace your routes just right, you can save on gas here and there. Don't give up the car but use it less (Probably saved you another 50 bucks right there)
When you're lease is up, rent a room for $400 a month instead of an apartment. If you must have an apartment- try finding something cheaper. Look into housing assistance.
Off the top of my head, I think I saved you about $6,000.
I heard on the radio today that the average "poor" person in the US today has at least one color TV, a car, a microwave, a cell phone, dishwasher, air conditioning, etc. The average "poor"person here has a better lifestyle than the average person (not poor) living in Europe.
There are plenty of things that people could live without but choose to have, even if it means going into debt. Growing up, my family didn't have a car. My mother would have to walk to the supermarket and cart all of the groceries back (in several trips) while toting the kids along with her until some of us were old enough to stay home and watch the younger ones. Back then that was what you did when you didn't have a lot of money. Nowadays you just get what you want, put it on your charge, and then whine about how unfair it is that your score went down because you didn't make your payment on time.
Once again a stupid suggestion. Why is this stupid? Because A. I already signed a lease. B. I live in Orlando $800 is not expensive for a 2 bedroom in Orlando.
There is nothing stupid about the suggestion, in fact its probably the best financial advice you'll ever hear. Its straight out of the book I cited which was written in the 20s. Save 10% of your pay and you'll be financially healthy don't and you'll have financial problems. You pick.
Regardless, I don't understand the point of your straw man. Its bad advice because you signed a lease? Is it for eternity? If not give a cheaper place once the lease is up. The point is if you really wanted to you could save 10% of your pay and within a few years you'd have that $10,000.
Quote:
...those cards that get charged off will be there for 7 years.
If it was never removed maybe what you said would have a point, but it is removed. Not only that the older it gets the less it effects your fico score. Do people change much from year to year? No, not really. So if you just ripped off some other people and didn't pay them back, why would I want to loan you money 2 years later so you could do it to me?
Sometimes if somebody has a poor credit history it's because of circumstances beyond their control, like lay-offs.
Part of being fiscally responsible is having a plan in place in case of circumstances beyond your control. Emergency savings funds, not borrowing to buy consumer goods, paying cash for cars, being properly insured... all of these things mean that you are ready for just about anything that life throws at you.
Everything you posted would be okay in a dream world but sadly this is a real world, with real live people and real life problems.
Uh yeah in high school they do push you into college with the golden dream of scholarships - well I graduated with a 3.65 and I got not one scholarship. But it was okay cause I had a nice pell grant. But there are kids who don't qualify for a pell grant and have to take out loans. Yas of course you could go to community college - but in case you hadn't heard those are almost as expensive as universities now.
Oh I love when people say "you can work while you're in school" - most students do work. But things cost money. My books were $600 every semester. That's a whole damn paycheck for books. Not to mention the parking decals, the scantrons, the planners, the interactive CD's, the health fees, the student ID card service fee, and all the other fees they tack on. I guess the answer to that would be live at home with your parents or get roommates until you are financially able to live alone. Dream World.
And sure you can spend 8 years in college - then when you graduate you'll be 26 years old entering your field with no experience and you're older than all of the other entry level people so you probably have more bills. Of course you could have spent the last 8 years working at a job that was in your field and will promote you once you have your degree. Dream World.
And yes you can postpone your student loans but that doesn't stop the interest.
Of course EVERYONE has an emergency fund that they can live off for months. Of course EVERYONE who has kids says "I know my son wants to go to camp but I better save this money in case I get laid off next week" or "I really wanna go home for Christmas but I better save this money in case I fall down the stairs, break my ankle and can't work for two weeks and I've only been on my job 60 days so I don't have benefits yet" DREAMING!
I know plenty of young, single mothers - making $10 an hour - who budget their checks down to the penny. There is no extra money. There is no money to save. How do i know this? Because I volunteer for a program that helps these girl open checking and savings accounts and establish and maintain credit. I see people everyday who work at 40 hours a week and when they get their paycheck it's gone before they cash it. These girls aren't out buying Gucci bags and Prada earrings, they're buying pampers.
Try having kids you can afford. There are always going to be exceptions, but usually in these cases there was no forethought whatsoever with regards to whether or not they can afford children.
This all highlights that the credit scoring system is fair.
Those who plan ahead, who don't borrow money without the resources to pay it back in case of unforeseen circumstances, and who make sure they are fiscally stable before indulging in luxuries, don't have problems with their credit scores. People who make sure that they can afford to raise a family before doing things that might make them pregnant don't have problems with their credit scores. They continue to pay their debts on time.
Credit scores are a measurement of the risk that a lender will take when lending to an individual. If a debtor lives so close to the line, paycheck to paycheck, that they can't afford to make their debt payments then they deserve to have a lower score. They are a greater risk to the lender.
It wouldn't be fair if people who didn't plan had the same score as people who did, because the latter group clearly is less of a risk to a lender.
For many reasons, but here is one that gets me:
You can have excellent credit if your score is between 750 and 850, a 100 point range.
You can have good credit if your score is between 660 and 749, a range of about 90 points.
You can have fair credit if your score is between 620 and 649, a range of only 29 points.
However you have poor and poor is a very strong word, credit if your score is between 350 and 619, almost 270 points!
How do the credit card companies get away with this stuff, along with all the other crap they get away with (like runing credit over unpaid/underpaid medical bills)?
Of course, I can hear the conservatives say, manage your own credit properly and you won't have this problem.
Well, it is not always that easy, again, always, that easy.
You answered your own question.
It's not that they get away with it. You apply for credit cards. They aren't necessary to survive. You apply for car loans and home loans. They aren't necessary. It is possible to survive with a zero credit score. It means most of the things that you want now you'll have to put off to have. And in today's society of instant gratification that's not always easy, but yes, it can be done. And it's the best way to get around the system.
I sympathize. My husband and I have gone through major financial upheaval when he was forced to retire due to a medical disability. We lost nearly $100k a year when he did. It's not like we did anything 'wrong', but we had put ourself in the situation we were in. We had bought 2 new vehicles on loans. We had 4 credit cards. We lived in one of the most expensive areas of the country. No, the medical problems weren't his fault. But the financial straights we'd put ourselves in were.
We sold everything we had, packed our things, and moved with our 4 teen agers to TN. We're starting over. And doing it right. No more loans for anything. We sold both vehicles and bought a used car and van that we could pay cash for. The credit cards went to creditors until we can get to them. My husband has a minimum of 6 doctor's appointments a month. We have over $100k in medical bills and more piling up daily. We'd made verbal payment arrangements with a local hospital who turned around and sued us anyway. Lesson learned - get everything in writing, trust no one.
We're finally just starting to see the light at the end of the tunnel. After more than 18 months my husband's disability has been approved. We're taking a good bit of the money and investing it in repairs that need to be done to make our home liveable, such as heat and air that we've lived without all this time. Remodeling the master bath to accomodate my husband's needs. The rest of that first check is going to go to start wheeling and dealing with creditors over all that debt.
I'd love to retire and stay home to care for my husband. But it's not going to happen for a long time. We'd love to build our dreamhome further north in the state, but that's on hold for at least 5 years. We'd love a second home in Maine for the summer months to get hubby away from the heat and humidity here. We'd each love new vehicles so we don't have to keep dumping money into ours for repairs. And some day we'll have all those things. But we won't be playing any financing games to do it. Cash only from now on. As long as the mortgage (yes, we do have one loan) is paid, the utilities are paid, and there is food on the table and clothes on the kids, everything else must wait. Period. It's just part of being a grown up in our opinion.
Check out Dave Ramsey. He's a total kill joy!! LOL!! But if you stick to his plan you'll eventually be free of the credit score monster that's bringing you down!
QUOTE::::[ Rent: $800 - course I guess I could move back home but then I'd have a skip on my credit.
Car Payment: $210 - course I guess I could give my car back but then I'd have a repossesion on my credit.
Car insurance: $90 - course I guess I could drive without insurance, but then my license would get suspended.
Lights: $110 - course I guess I could sit in the dark but they would probably report me to child services.
Water: $50 - ditto from above
Phone/Cable/Internet Combo: $150 - course guess I could do without but how would I job hunt without internet & how would they call me if I had no phone?
Gas for my car: $200 - course I guess I could catch the bus - might be a little harder to get to interviews but oh the money I'd save.
Daycare for 4 weeks: $600 - course I guess I could leave him alone by himself.
END QUOTE.....
Drop the internet and use the public library. (I saved you 50 bucks a month)
I've used the bus system in Orlando and if you trace your routes just right, you can save on gas here and there. Don't give up the car but use it less (Probably saved you another 50 bucks right there)
When you're lease is up, rent a room for $400 a month instead of an apartment. If you must have an apartment- try finding something cheaper. Look into housing assistance.
Off the top of my head, I think I saved you about $6,000.
Moving back home and selling the car and paying cash for something saves you over $1000 right off the top. $12k a year. Yep, you'll have a skip, but if you're not paying your bills, a skip is the least of your worries. Talk to the apartment complex - many of them will let you out of the lease early if you tell them what's going on. You may have to pay a penalty, but they most likely will allow you to even make a payment on that.
And moving back home saves you another $310 in utilities.
I had to move back home when I got divorced. I had 2 kids. It sucked. No one says it doesn't. But it's a chance to get back on your feet and do things the right way the next time.
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