Financial Restructuring

My personal loan came through and I have made payments to my credit cards. One of them has posted already (YEY), but I'm still waiting on the others. My CC debt will now officially be $0, but I will be adding my personal loan. The amount of the loan was more than my CC's, and I've put the difference in savings until I have to make my first payment. I'm going to start off with the full total here of $2375 and track downwards from there. My goal is to have this loan paid of by March 2008, which was my original goal for the CC debt.

A Solution

Well, after my frustration yesterday I had an appointment with a loan officer at the bank. We looked at my situation and what my financial goals were and they came up with something for me! I'm getting a personal loan that will allow me to pay off my CC debt completely. It's actually more than I need, so the extra amount I am paying back on the loan immediately. There are no fees and no pre-payment penalties. I was also awarded a Credit Card that will help me start rebuilding my CC history. I plan on using it for about $30-50 a month worth of gas/food and then paying it off in full monthly. That way I can start to re-establish a solid re-payment history. Based on my credit report 'what if' scenarios, paying of the CCs and opening these new accounts should increase my score by 25-30 points!!! :)

GRRRRR..................

So I decided to give the old "hey can you lower my interest rate?" tactic a try and it led to one frustrating phone call after another. Here's the backstory...in my last post I referred to one of my cc's as "KILLER". This account went delinquent almost a year ago and was closed & placed with a collection agency in March 2007. Of course, b/c of the delinquency my interest rate shot up to a whopping 30.45%. In the last 7 months I have been on time with all payments, always paid more than the mins, enough so to have brought the account current. So first I call the CC company...they tell me to call the Collection agency. So I call the collection agency and talk to some moron who could hardly understand what he was seeing on the computer in front of him. I ask him about the interest and he says the CC company handles it and I need to call them. NICE, cause they just told me to call you! :) Anyways, while I have him on the phone I ask if there is anything he can do on his end to help me pay things down faster without settling the balance. He said, well if you pay the balance in full you won't get any late fees/over limit fees. So I say, but I'm not late or over the limit...then he backpeddles and says, oh your right b/c your limit is $X and I say, no my limit is $Y. Then I hear a bunch of garbled gibberish as he tries to say something profound, but no actual sentences come out. So I thank him for his time and call the CC company again. this time I get someone on the phone (CS is definitely outsourced overseas) and ask for interest rate options. She says, well we do have a debt management program with a fixed rate of 9%, and yada yada yada. I'm like, sign me up! So she gives me the phone number (which I'm thinking is another department) and I give them a ring. It's a Credit Counciling Service...I talk to the lady there and tell her my situation (Card with a balance around $650 and 30%+ interest) and she flat out tells me that I'm better of not to use the program b/c of how it would affect my credit. Then she says why don't you call the CC company back and ask again. So I do and they say that the only thing they can offer is that debt management program and there's nothing they can do to the interest rate. So I'm going to try and get rid of this thing ASAP, but I'm not sure how other than what I've been doing thus far...just one paycheck at a time.

Taking action

So I decided to move some of my savings around to pay down some CC debt. I had a card sitting just under $200 and another with a KILLER interest rate, so I paid of the small one and took a chunk out of the KILLER. Now I only have 2 CCs left and have cut my CC balance in 1/2 since May. I want it completely gone by March 1st, 2008 at the latest.

What-ifs

I have a subscription to a credit monitoring service that I use to track my credit score on it's way to recovery. Well, in my down and out situation I decided to go online and look at it...nice thing is the score is definitely going in the right direction, just taking a while to get there. However, they have this cool feature that lets me play out "what-if" scenarios on my credit report.
So here's what I found out:
- Paying off all CC debt will raise my score by about 29 points.
- Making on-time payments for 3 months with add 6 pts; 6 months will add 23 pts; 1 year will add 38 pts; and 2 years will add 69 pts.
Since I want to improve my credit situation so I can potentially buy a house in the next 2-4 years I think I'm going to scale back on the savings and pay down my cc's faster. The sooner I can get my credit score up a bit, the better chances I have of obtaining better credit options. Plus, if I can establish a decent score sooner and hold onto it for a while, that will help even more.

Down and Out

I'm having a down and out day today. One of those days where you feel like a hamster in a wheel...trying really hard and going nowhere. Work has been wierd...the day to day stuff has been slow and boring, but the behind the scenes, corporate politcal BS has been rather tumultuous. Luckily I had my review in June, b/c as of last week they put a freeze on all promotions, raises and new-hires for some unknown reason. Usually companies do this when they are hitting financial rough spots, but to my knowledge we've been doing nothing but having a great year.
On another note, I'm really hating how long it's taking to A) pay off my debts & B) raise my credit score. I don't list my interest rates on the WIRR board, b/c I see them balking at rates lower than mine. And my credit is still recovering from being so jacked up that I don't have the ability to transfer to new cards with low rates or get a consolidation loan.
So today i'm torn...do I cut back on the debt repayments and develop a nice hefty EF? Or do I cut back on the savings and get rid of more debt faster? Depending on the moment, I have the urge to do both.