….and it was not pretty. I mean, I knew it wouldn’t be– this isn’t a surprise. Credit card debt. Bankruptcy. Short-Sale. (We bought at the top of ’07. See “Our Story” for more financial voyeurism.)
After avoiding the issue of our credit score since the short-sale last February, we decided we really needed to see the whole picture. We can’t move forward and clean up our mess if we don’t know where we’re coming from.
The realization that we have such a long road ahead of us, when we feel we’ve already been put through a financial ringer (albeit a perfect concoction of bad luck and poor choices) have made us tired.
We each sat on our very -well -jumped- on sofa, with our laptops on our knees, staring blankly at the screens and the big black numbers on them. Immediately my brain starts to swim with how do I fix this NOW kind of questions. I had a very lengthy discussion with myself about just how much I like and need sleep thinking that a night job would help here. (Apparently, I like it and need it approximately 7 hours a night.)
All of this was magnified by the conversation we had with our kids over dinner tonight when our daughter, who is an adorable, precocious 4 year old said: ” remember at our old house when we had the big playhouse and the swings and the big yard to run in? Remember, mom? When we get a real house again, can we have a playhouse?”
We told her yes, of course we can get a great big swing set and hopefully we’ll have a great backyard where dad can grill again. We can play tag and plant gardens like we used to. They were happy there– we were happy there. My heartstrings strummed and broke.
I digress. We got our credit scores today. They stink. How to make improvements?
The number one way to improve credit card scores is to have a very low debt-to-income ratio and pay bills in a timely fashion. One online resource suggested calling our credit card companies for an increase in our credit limit to try and right the available balance to total credit ratio. We are not advocating or considering this option.
The other recommendation was to try and consolidate debt into one larger but lower interest loan. Fantastic for those that don’t have a less than average credit score; near impossible for those of us that do.
After reading the latest issue of Money Magazine and their article about peer to peer lending (taken from an investor viewpoint), we thought we might have a shot there. We did a soft application with both Lending Club and Prosper (the two companies profiled in the article). Both referred us to a lender outside of their “preferred lenders” because our credit scores were too crappy. No– “crappy” isn’t the word that popped up on the company website- though I would’ve laughed and loved them more if it had! (I also would’ve reacted kindly and with laughter to the term “rubbish,” read in my head with a British accent.)
Those are the only things we can do to improve our credit scores. We’re still shopping around for ways to consolidate some of our high-interest credit cards and student loans. Maybe once we get in a slightly better position we can try again with a consolidation that will help with some of our higher interest private student loan debt.
What ways have you found to improve your credit scores?