Posting under AE- DH has horrible credit

[aehelpme1]

So DH was irresponsible in the past and has horrible credit. His score is currently 610. He wants to raise this. He pulled his report. He has 3 medical bills for a total of about $1200 in collections. We should go ahead and just pay these off right? I believe he has had other things in collections but they have fallen off his report. It has been more than 6.5 years since he made these mistakes.

If these are paid off then his score will go up slightly? I'm hoping to get it to upper 600s eventually, so he can apply for his own card. I just added him as an authorized user on my card, but reading what Dr. girlfriend said to the other poster regarding her husband's lack of credit, I'm going to look into adding him as a joint user as well.

Anything else we should do? Everything (house and car) is in my name and has been the 6 years we have lived together.

[WOT?*]

First off, how old are the medical bills? If they're about to drop off his credit report, I'll be the bad apple to say don't pay them and don't contact them. Let them fall off the report. If you contact or pay, that will re-open the debt and it will remain on his credit report (albeit in a "late paid" status) for the next seven years unless you can talk them into removing it from the credit report.

[Kore]

Paying them off probably won't help his score at all. They'll still be on the report. How old are they? If they're close to 7 years, you can write to the credit reporting agencies & request that they be removed.

Another option is to call the collection agencies & tell them you'll pay in full if they delete it from his report. Get it in writing before you pay.

I had to get some ancient/inaccurate stuff off of my report years ago, and found the forums at creditboards.com to be rally helpful. Check out the one for medical collections, specifically. It'll take a lot of reading, but they've got suggestions for every scenario.

[phunluvin82]

The authorized user should help his credit. They changed it because of fraud, or 'piggybacking', but they've since reversed it again:

www.credit.com/credit_information/credit_report/Consumer-Alert-FICO-Formula-Changes.jsp

My H has 3 accounts of mine showing up on his credit for the last year or so that he's an AU on.

[Deleted]

He can get a prepaid credit card. You pay $500 or whatever for the card, then use it once a month for a tank of gas and pay it off right away.

[M]

DO NOT PAY OFF THE MEDICAL BILLS!!! Things on your credit report (good and bad) roll off every 7 years. If they're at 6.5 years then they'll roll off on their own in 6 months and you'll start seeing his score increase on it's own. If you make even a $1 payment to collections then it will reset to last date of activity and start his 7 years over again. I wouldn't even contact the creditors about this because they will hound him for the next 6 months to get him to make some kind of payment on it.

Authorized user on your CC will help. At 610 credit score, he can get a secured card that all in his own name and that should help a lot. Whatever you do, do NOT pay anything to collections.

[dr.girlfriend]

Jan 3, 2013 2:03:38 GMT -5 phunluvin82 said:

The authorized user should help his credit. They changed it because of fraud, or 'piggybacking', but they've since reversed it again:

www.credit.com/credit_information/credit_report/Consumer-Alert-FICO-Formula-Changes.jsp

My H has 3 accounts of mine showing up on his credit for the last year or so that he's an AU on.

Ah, sorry for giving bad advice. I didn't realize they had reversed it. That same website has a link for "rebuilding credit" -- here's the info it gives:

www.credit.com/credit-cards/bad-credit-questions/40117/rebuilding-your-credit.jsp

[Deleted]

Jan 3, 2013 9:18:47 GMT -5 @crackhabit said:

I agree with do not pay off the medical bills if they are about to fall off, but beware of zombie debt. The collection agency can sell them to a different agency and these secondary agencies can go to great lengths to harass and threaten. Know your rights when it comes to what collectors can and cannot do.

If you don't pay, he still owes the debt, and the statute of limitations prevents them from suing you for the money but they don't have to stop trying to collect it.

This. DH has a couple of old debts (probably 10+ years old now, we've been together 8) and they are not on his report anymore but occasionally I'll get a random call about them. I always tell them either I don't know him or if they catch me and know I'm his wife, I'll tell them they're past the statute of limitations and we're not paying, especially to some random person calling me out of the blue with no documentation and no evidence on his credit report. They usually stop after I ignore the next few tries It's annoying, but his credit is a lot better now and we're not about to pay on something that will affect it at this point.

[Deleted]

Also I'm LOLing a little bit that the posts all say not to pay it. Usually MM is like "it's YOUR debt! You must pay even to your detriment! What kind of horrible person are you if you don't pay your debt???". I agree with the advice in this thread and have followed it myself, but I'm chuckling a little bit that I'm not the only deviant right now.

[MixedBerryJam]

I'm sorry your husband is having credit troubles, I really am, but I gotta admit, I'm a little shocked that MM is going all "don't pay those bills!Eleventy!" It's a legitimate bill for a legitimate service. A service provider that is 6.5 years in arrears still deserves to be paid, no? How about paying off the bill, even though the seven years is about to pass, and then your husband will be able to work on his credit score and not his conscience.

ETA: Buckybells, JINX!

[Deleted]

My DH started a construction business in mid-2008. Needless to say the timing was awful and due to the business failing and lack of cash flow he ended up taking a huge hit to his credit report at that time.

The first thing we dealt with was that he was struggling/failing and not telling me and digging deeper into debt out of embarrassment and also thinking "things would turn around" at any minute. Then we combined our finances and he forfeited any debit card/cc, etc. His choice - I didn't 'punish' him, he just wanted to acquire the discipline to work within the system (he had worked construction his whole life and used cash for everything most of his adult life). So for about a year and a half he had cash for coffee or whatever and everything else went through me. After that it was apparrent that he was totally responsible and we were working as a team and we have been disciplined in paying down debt and saving an E-fund ever since.

Ok, once you address the behaviors that landed him in a bad situation then you need to start fixing the report. What we did was make payment arrangements w/ those who would work with us. Then we made settlement arrangements for 2 charged off credit card accounts. We figured his credit was already shot so it was the best option at that time. Plus his income was so low for that year that the tax implications didn't matter. Then we just plugged away at it and made all payments on time going forward. It's been about 3.5 years since we did all this and his credit is already back up to a respectable number. Not awesome, but respectable. The most important thing, I'll say again - is not to band aid the credit issues without addressing the behaviors. Make sure you tend to both or you'll find yourself here again. Good luck.

[agnes]

Jan 3, 2013 10:36:51 GMT -5 MixedBerryJam said:

I'm sorry your husband is having credit troubles, I really am, but I gotta admit, I'm a little shocked that MM is going all "don't pay those bills!Eleventy!" It's a legitimate bill for a legitimate service. A service provider that is 6.5 years in arrears still deserves to be paid, no? How about paying off the bill, even though the seven years is about to pass, and then your husband will be able to work on his credit score and not his conscience.

ETA: Buckybells, JINX!

Because it wouldn't be a wise money decision. It would start the clock for another 7 years if he paid on this debt. Chances are the debt has been bought and passed off at a nominal fee by numerous creditors trying to collect.

If it makes you feel better, he can donate the money to a charity of your choice and still let the debt fall off. It evens out, right? lol

[aehelpme1]

Ok we won't pay or contact them. I know how this board responds to things like banangate, so I fully expected to hear "omg you must pay your debt!!!!!" We have never been contacted by collections knock on wood. Our home, car, and bills are in my name. DH only has a debit card on his checking account which I'm also on, and now he is an authorized user on my cc. We aren't making any big purchases anytime soon, but building his credit is still important to us.

[aehelpme1]

Jan 3, 2013 10:51:42 GMT -5 @sirsleepsalot said:

Ok, once you address the behaviors that landed him in a bad situation then you need to start fixing the report. What we did was make payment arrangements w/ those who would work with us. Then we made settlement arrangements for 2 charged off credit card accounts. We figured his credit was already shot so it was the best option at that time. Plus his income was so low for that year that the tax implications didn't matter. Then we just plugged away at it and made all payments on time going forward. It's been about 3.5 years since we did all this and his credit is already back up to a respectable number. Not awesome, but respectable. The most important thing, I'll say again - is not to band aid the credit issues without addressing the behaviors. Make sure you tend to both or you'll find yourself here again. Good luck.

Thanks for this. DH actually isn't bad with money, but he only deals with cash now. This all happened 6+ years ago when he was 21-23. He was also making poor choices involving partying and drugs, but he has done a 180 since then. We have discussed how he will use the cc that I just added him to, and we have a plan.

[yourmom]

Jan 3, 2013 8:38:56 GMT -5 @kcpokergal said:

He can get a prepaid credit card. You pay $500 or whatever for the card, then use it once a month for a tank of gas and pay it off right away.

This isn't going to help him build credit at all.

[WOT?*]

Jan 3, 2013 12:34:38 GMT -5 yourmom said:

Jan 3, 2013 8:38:56 GMT -5 @kcpokergal said:

He can get a prepaid credit card. You pay $500 or whatever for the card, then use it once a month for a tank of gas and pay it off right away.

This isn't going to help him build credit at all.

It's how I was able to start rebuilding my credit after my divorce. Ex devastated us financially and I couldn't even get a store card from Sears or JCP or anyone who would give just anyone a card. I got a secured that reported to the credit agencies, used it wisely and within two years had the best credit scores the cell phone company had seen in...ever...and didn't have to pay a deposit when my expectation was that I would have to pay several hundred down, just like everyone around me did.

[M]

Jan 3, 2013 12:34:38 GMT -5 yourmom said:

Jan 3, 2013 8:38:56 GMT -5 @kcpokergal said:

He can get a prepaid credit card. You pay $500 or whatever for the card, then use it once a month for a tank of gas and pay it off right away.

This isn't going to help him build credit at all.

This will absolutely help him rebuild his credit. I was a credit manager at a big bank and helped people rebuild their credit...this is the best way to get started.

[yourmom]

Jan 3, 2013 13:53:20 GMT -5 M said:

Jan 3, 2013 12:34:38 GMT -5 yourmom said:

This isn't going to help him build credit at all.

This will absolutely help him rebuild his credit. I was a credit manager at a big bank and helped people rebuild their credit...this is the best way to get started.

No, they don't. Unless you are talking about PRBC - they do not report to the 3 major credit bureaus.

I have worked in cards for 15+ years. Working specifically on prepaid for for 5+ years if we are throwing out qualifications.

Or here:
www.bankrate.com/finance/credit-cards/best-ways-to-establish-credit.aspx

www.doughroller.net/credit-cards/prepaid-cards-build-credit/

money.cnn.com/2012/05/08/pf/prepaid-cards-what-to-know/index.htm

[hlke]

Jan 3, 2013 15:51:44 GMT -5 yourmom said:

Jan 3, 2013 13:53:20 GMT -5 M said:

This will absolutely help him rebuild his credit. I was a credit manager at a big bank and helped people rebuild their credit...this is the best way to get started.

No, they don't. Unless you are talking about PRBC - they do not report to the 3 major credit bureaus.

I have worked in cards for 15+ years. Working specifically on prepaid for for 5+ years if we are throwing out qualifications.

Or here:
www.bankrate.com/finance/credit-cards/best-ways-to-establish-credit.aspx

www.doughroller.net/credit-cards/prepaid-cards-build-credit/

money.cnn.com/2012/05/08/pf/prepaid-cards-what-to-know/index.htm

I think PP actually meant a secured card, not a prepaid card.

[M]

Jan 3, 2013 16:27:42 GMT -5 hlke said:

Jan 3, 2013 15:51:44 GMT -5 yourmom said:

No, they don't. Unless you are talking about PRBC - they do not report to the 3 major credit bureaus.

I have worked in cards for 15+ years. Working specifically on prepaid for for 5+ years if we are throwing out qualifications.

Or here:
www.bankrate.com/finance/credit-cards/best-ways-to-establish-credit.aspx

www.doughroller.net/credit-cards/prepaid-cards-build-credit/

money.cnn.com/2012/05/08/pf/prepaid-cards-what-to-know/index.htm

I think PP actually meant a secured card, not a prepaid card.

www.wellsfargo.com/credit_cards/secured/

This is what I thought we were all talking about. The big bank that I use to work for also pulled credit for this and were definitely reporting to the credit bureaus. I've never heard of a pre-pay credit card that doesn't report except for those annoying Visa/MC gift cards that people waste $5 on to give as gifts haha. But I guess I learned something new and OP should be sure to ask before applying then.