In my life, I have went from having really good credit, to absolutely atrocious credit to having credit that I can get by with. With this knowledge of being all over the map, Hopefully I can help out with those that are wondering how to get out of debt, or at least how to manage it. So let me tell you about my story.
When I was younger, early to mid 20's, my credit score was outstanding. Over 760. It didn't matter where I went, I could walk in, sign my name and walk out of there with whatever I wanted. One thing led to another and that score started to go down. I fell behind on some payments, sold off the cars and bikes which removed the loan from my credit report so no one was reporting. I went for quite a few years and just idled and my score got pretty bad. Not horrible, but pretty bad because I didn't have anything showing what it was that I was doing.
Come into about 2013, Things were looking up, I purchased my wife and I two brand new Kia's that we both absolutely hated (lol) so we traded those in on two brand new Mopar vehicles. A Dodge Charger and a Ram truck. Well, one thing led to another, times got tough and we ended up losing both vehicles. And let me tell you, that was a TON of debt.
We rode around for the next 6-7 years and just figured eh if we ignore it, the debt will just fall off. Neither of us made enough money to pay off the loans that were remaining after losing the vehicles so there was nothing we could do. Well, there was one thing, we could file for bankruptcy but I really didn't want to do that. With the new'ish laws that were in place, it costs way more money, it is prolonged in the process and your assets come into question. One such asset was Rc-Help. My lawyer didn't know what would happen to the website as it was not a physical "thing", however it was making money so it was technically an "asset". I asked if I could possibly have to give up the website and he said it would be very likely. The only thing we could really keep was 1 house and 1 vehicle.
So with the threat of losing Rc-Help, I pretty much made up my mind that I would just let it ride. By this time, the two vehicles had fallen off my credit report and I thought we were done with it. But we were not.... Not even close.
In late 2021, we received a letter from the government that the debt from those two vehicles were in fact dismissed, however there was a catch. Since the debt was dismissed, we had to file this as income. I will not say the amount, but it was a lot of ""income"" (yea, double quotes). Income that we never saw. Income that we never were able to use. But we have to file that on our taxes as income. To say this was bad is an understatement. My entire plan with life is to stay as far away from the government having a firm grasp on my balls as I could. This all changed when we filed our taxes for 2021.
We ended up owing thousands of dollars to State and Federal. THOUSANDS! And at the time, we only saw one way out. We need to contact each agency and setup a payment plan. For Federal, that was pretty easy. We setup a plan to pay in $200/mo for however long it would take to pay off the debt. For State, it is far more difficult to setup a payment plan for them and we were faced with a lump sum of thousands of dollars that we had to pay. Thousands of dollars that we just flat do not have.
While sitting at my desk, I started adding up all of the bills that we have. I also have medical bills from 2020 however thankfully I had insurance through my job and those are not that high. But, I added up all of the bills and what I was paying in interest, looked into what we were paying into State and Federal and their fee's for being "late" (late as in I could not pay them when we filed) and I just sat back and thought about the different options that were out there.
You hear it all the time though, consolidate your debt into one lump sum. But I never really looked into this because when I was faced with this much debt over the years, my credit score had taken such an impact that there was no way any bank in their right mind would help me out. It's kind of a catch 22 situation though. On the one hand, the bills had gotten so bad that my credit score took a huge hit and no bank wanted to touch me. On the other though, if I could get one sum to pay off all of the others, not only would I improve my credit score by paying those off, I would also lower what I was paying every month, and I would pay LESS since it was only one fee per month rather than quite a few fees. But how the hell do we do this when no bank wants to touch us?...
I want to start this next part off with this is not a sponsored post. This company doesn't even know I exist other than looking into their site once in a while. This is 100% me, there is no affiliate link, there is absolutely no kick back to me other than making this post to hopefully help someone else out by explaining my situation and how we were able to get out of it.
I went over to www.CreditKarma.com which is a very well known credit reporting agency. If you do not know about it, then you need to sign up. You get your credit scores free of charge. And most importantly, if you need to dig out of a hole, they actually have banks that are willing to help out those that really need it. Quite a while ago, I decided I needed to take the first step in raising my credit score back up and I went over to their site and looked into unsecured credit cards. I didn't want secured personally, however for some that may be the right option. I wanted unsecured even though it was going to cost me more in the long run. And I ended up getting one.
With this card, it only had one purpose. Use it, and pay it off every month. Pay it off before they had the chance to tack on any fees or interest. So on the 26th of every month, my cell phone bill is charged to this card. On the 1st of every month, I have the card setup to pay the balance in FULL. Is cheating? Maybe. But I see it as a "feature, not a bug" lol. What this is doing is showing that I'm using the card, making on time payments and keeping my total used credit under 10%. This, in just a few months has DRAMATICALLY improved my credit score. Even with some negative reports on my credit report, my credit score just this month alone went up 69 points (NICE!). And no, that is not just for the LUL's, it literally went up 69 points. That is HUGE!
But how does this help you if you are like I was just two years ago? You know, where banks will not touch you? Basically, you need to set a 3 year plan in motion. The first year, look into gaining "Available Credit". This is pretty much Credit Cards. In that first year, use the cards. If you have a $500 limit (pretty common for a lot of the high risk cards), Then you never want to use more than $50/mo for that card. Yea, seems pointless, but trust me. Use the card(s) and pay them off EVERY MONTH. When you make a payment, you want a $0.00 balance. And you want to do this before you get charged interest. In doing this for 1 year, you will establish a history of making payments. And that will lead up to what the wife and I did today.
Once you have raised your credit score, once you have raised your credit history and once you have raised your available credit, banks will now WANT to loan you money. It's how they stay in business. And with this loan, which you can also get from www.CreditKarma.com, you can consolidate all of your bills into one single bill that in my case, is saving us money every month.
As of today, we have been approved for an amount of money to not only pay off State and Federal, but also pay off credit cards and pay off medical bills. This money will be in our account in 4 days and on that 5th day, it will all leave our account. We will pay off State and Federal, we will pay off those back due bills that are killing my credit report and remove them within 1 month and we will pay off the credit card that we use to purchase new things for the house (we don't really need to pay this one off, but we have the money coming, the interest is lower, so why not).
In 2 months, my credit score should be over 700 for the first time in about 15 years. For the first time in my life, I will have the burden of horrible debt lifted off me. I will finally be in a position where I can just do what I want to do, not what I have to do. I will no longer have to duck calls. I will no longer have to decide if I want to open that envelope that came in the mail with fear that it's another setback. I will have taken all of those bills, and put it into one bill that will automatically debit from my account every month like clock work. And paying back that loan... helps my credit even more!
The TLDR is, if you have quite a few companies (over 5 I would say) that you owe money to, check www.CreditKarma.com and see if you can get a personal loan to pay off all of those bills and reduce it into one bill. There are various rates, various terms and various amounts that you will be offered. If they are not offering enough, then start small and do what you can at first! Your credit will build up and you will be able to take out another loan at a lower interest rate to pay off the rest of the bills plus the initial loan and bring everything into one, single, loan! And in the end in most cases, you will actually pay less in the long run.
Oh, and we took out a little more to do a little 'improvement' in my office as well. Stay tuned for that lol.
When I was younger, early to mid 20's, my credit score was outstanding. Over 760. It didn't matter where I went, I could walk in, sign my name and walk out of there with whatever I wanted. One thing led to another and that score started to go down. I fell behind on some payments, sold off the cars and bikes which removed the loan from my credit report so no one was reporting. I went for quite a few years and just idled and my score got pretty bad. Not horrible, but pretty bad because I didn't have anything showing what it was that I was doing.
Come into about 2013, Things were looking up, I purchased my wife and I two brand new Kia's that we both absolutely hated (lol) so we traded those in on two brand new Mopar vehicles. A Dodge Charger and a Ram truck. Well, one thing led to another, times got tough and we ended up losing both vehicles. And let me tell you, that was a TON of debt.
We rode around for the next 6-7 years and just figured eh if we ignore it, the debt will just fall off. Neither of us made enough money to pay off the loans that were remaining after losing the vehicles so there was nothing we could do. Well, there was one thing, we could file for bankruptcy but I really didn't want to do that. With the new'ish laws that were in place, it costs way more money, it is prolonged in the process and your assets come into question. One such asset was Rc-Help. My lawyer didn't know what would happen to the website as it was not a physical "thing", however it was making money so it was technically an "asset". I asked if I could possibly have to give up the website and he said it would be very likely. The only thing we could really keep was 1 house and 1 vehicle.
So with the threat of losing Rc-Help, I pretty much made up my mind that I would just let it ride. By this time, the two vehicles had fallen off my credit report and I thought we were done with it. But we were not.... Not even close.
In late 2021, we received a letter from the government that the debt from those two vehicles were in fact dismissed, however there was a catch. Since the debt was dismissed, we had to file this as income. I will not say the amount, but it was a lot of ""income"" (yea, double quotes). Income that we never saw. Income that we never were able to use. But we have to file that on our taxes as income. To say this was bad is an understatement. My entire plan with life is to stay as far away from the government having a firm grasp on my balls as I could. This all changed when we filed our taxes for 2021.
We ended up owing thousands of dollars to State and Federal. THOUSANDS! And at the time, we only saw one way out. We need to contact each agency and setup a payment plan. For Federal, that was pretty easy. We setup a plan to pay in $200/mo for however long it would take to pay off the debt. For State, it is far more difficult to setup a payment plan for them and we were faced with a lump sum of thousands of dollars that we had to pay. Thousands of dollars that we just flat do not have.
While sitting at my desk, I started adding up all of the bills that we have. I also have medical bills from 2020 however thankfully I had insurance through my job and those are not that high. But, I added up all of the bills and what I was paying in interest, looked into what we were paying into State and Federal and their fee's for being "late" (late as in I could not pay them when we filed) and I just sat back and thought about the different options that were out there.
You hear it all the time though, consolidate your debt into one lump sum. But I never really looked into this because when I was faced with this much debt over the years, my credit score had taken such an impact that there was no way any bank in their right mind would help me out. It's kind of a catch 22 situation though. On the one hand, the bills had gotten so bad that my credit score took a huge hit and no bank wanted to touch me. On the other though, if I could get one sum to pay off all of the others, not only would I improve my credit score by paying those off, I would also lower what I was paying every month, and I would pay LESS since it was only one fee per month rather than quite a few fees. But how the hell do we do this when no bank wants to touch us?...
I want to start this next part off with this is not a sponsored post. This company doesn't even know I exist other than looking into their site once in a while. This is 100% me, there is no affiliate link, there is absolutely no kick back to me other than making this post to hopefully help someone else out by explaining my situation and how we were able to get out of it.
I went over to www.CreditKarma.com which is a very well known credit reporting agency. If you do not know about it, then you need to sign up. You get your credit scores free of charge. And most importantly, if you need to dig out of a hole, they actually have banks that are willing to help out those that really need it. Quite a while ago, I decided I needed to take the first step in raising my credit score back up and I went over to their site and looked into unsecured credit cards. I didn't want secured personally, however for some that may be the right option. I wanted unsecured even though it was going to cost me more in the long run. And I ended up getting one.
With this card, it only had one purpose. Use it, and pay it off every month. Pay it off before they had the chance to tack on any fees or interest. So on the 26th of every month, my cell phone bill is charged to this card. On the 1st of every month, I have the card setup to pay the balance in FULL. Is cheating? Maybe. But I see it as a "feature, not a bug" lol. What this is doing is showing that I'm using the card, making on time payments and keeping my total used credit under 10%. This, in just a few months has DRAMATICALLY improved my credit score. Even with some negative reports on my credit report, my credit score just this month alone went up 69 points (NICE!). And no, that is not just for the LUL's, it literally went up 69 points. That is HUGE!
But how does this help you if you are like I was just two years ago? You know, where banks will not touch you? Basically, you need to set a 3 year plan in motion. The first year, look into gaining "Available Credit". This is pretty much Credit Cards. In that first year, use the cards. If you have a $500 limit (pretty common for a lot of the high risk cards), Then you never want to use more than $50/mo for that card. Yea, seems pointless, but trust me. Use the card(s) and pay them off EVERY MONTH. When you make a payment, you want a $0.00 balance. And you want to do this before you get charged interest. In doing this for 1 year, you will establish a history of making payments. And that will lead up to what the wife and I did today.
Once you have raised your credit score, once you have raised your credit history and once you have raised your available credit, banks will now WANT to loan you money. It's how they stay in business. And with this loan, which you can also get from www.CreditKarma.com, you can consolidate all of your bills into one single bill that in my case, is saving us money every month.
As of today, we have been approved for an amount of money to not only pay off State and Federal, but also pay off credit cards and pay off medical bills. This money will be in our account in 4 days and on that 5th day, it will all leave our account. We will pay off State and Federal, we will pay off those back due bills that are killing my credit report and remove them within 1 month and we will pay off the credit card that we use to purchase new things for the house (we don't really need to pay this one off, but we have the money coming, the interest is lower, so why not).
In 2 months, my credit score should be over 700 for the first time in about 15 years. For the first time in my life, I will have the burden of horrible debt lifted off me. I will finally be in a position where I can just do what I want to do, not what I have to do. I will no longer have to duck calls. I will no longer have to decide if I want to open that envelope that came in the mail with fear that it's another setback. I will have taken all of those bills, and put it into one bill that will automatically debit from my account every month like clock work. And paying back that loan... helps my credit even more!
The TLDR is, if you have quite a few companies (over 5 I would say) that you owe money to, check www.CreditKarma.com and see if you can get a personal loan to pay off all of those bills and reduce it into one bill. There are various rates, various terms and various amounts that you will be offered. If they are not offering enough, then start small and do what you can at first! Your credit will build up and you will be able to take out another loan at a lower interest rate to pay off the rest of the bills plus the initial loan and bring everything into one, single, loan! And in the end in most cases, you will actually pay less in the long run.
Oh, and we took out a little more to do a little 'improvement' in my office as well. Stay tuned for that lol.