Teresa Asks...

Q: After a separation from my spouse I received no money in the time he was gone from him for support. As a result I paid all the bills and also had a child in college to pay for. I did it but as a result due to late payments on bills etc my credit score dropped. How can I quickly raise it and how long does it take on average once you've dropped to increase it. I have done the obvious things like starting to pay religiously on time, dropping credit cards, asking for decrease in remaining interest rates but how long does it take and are there any tricks to rebuilding your credit number.

A: Teresa, the best way to raise your score at this point is to do a combination of things. First, let me complement you, you have done a lot right already, good job.

There are a number of factors here that we need to watch out for. For example, how does your credit report look? You should make sure that your credit report is as accurate as possible. Follow my credit repair 101 advice for starters.

Next, the key at this point is to replace your bad history with your new good history. Of course that will take some time but many people make significant progress within 6 to 12 months. I strongly suggest that you order a consolidated credit report right now along with your credit score. You won't know if it is going up unless you know what it is right now.

Lastly, before you cancel a single credit card you need to take stock of what you've got or it could actually do more damage than good. Under no circumstance should you close your oldest credit cards. Those cards carry your longest credit history and carry more weight than any new card.

Also, don't make the mistake of consolidating your debts onto one or two cards and then canceling your other cards. Rather than helping, you have just increased you debt to credit ratio and that can hurt you as well.

If you are looking for someone to help you with this I'd suggest either scheduling an appointment with me or go to Springboard.

Lynetta Asks...

Q: I owe 15,896.02 on a credit card bill. Recently, they raised my finance charge rate to 18.74% they said because I had something negative on my credit report. I got the free credit report and it was a student loan that I had cosigned for my nephew and he is always late paying on it. I always pay my bill ahead of time and with about $140.00 above the minimum. Is this legal for them to raise my rate and what is the best way to pay this credit card bill off?

A: Please get a copy of your consolidated credit report and take a look at it. A single bureau report is only 1/3 of the information that is being reported about you. You might find other bad things being reported that you don't know about on the other two reports.

Everything sounds in order to me. You cosigned for the loan and that means you are financially responsible for it. If your nephew paid the loan late it should appear on your credit report.

Most people do not understand what cosigning means. Typically when a cosigner is needed it is because the underlying applicant does not have a satisfactory credit history to get the loan. A cosigner has better credit and will be the first person the creditor will go after in case of default. When you cosign for a loan you are as equally responsible for the loans repayment and performance. By the very word, cosigner, you are signing for the loan also. Literally cosigner means to sign jointly. If the other party was more responsible for the loan I guess you would be the subsigner.

First order of business is to get and keep your nephew on track with his payments. Next, to pay off the credit card you should send as much as you can afford to on a regular monthly basis. It sounds like you might benefit from a 0% balance transfer card as long as you make maximum effort to pay off the card before the introductory period ends. You can find the current crop of balance transfer cards here.

One last rant about cosigners. Think about it like this, in an aircraft you have a pilot and copilot. When the plane crashes they both go with it.

Linda Asks...

Q: How do I get my spouse to realize that we have to stop spending money on non-essential items? It's always, well its 0% interest for a year so what do we have to lose? Also, just an FYI, this is a second marriage and I make more income than he does. Thanks.

A: Linda, your new love lacks financial clarity. The 0% teaser is just the marketing ploy and it sounds like it is working fabulously on him. The creditors are cheering.

The reason your hubby overspends is not related to the obvious aspects of money. For him it sounds like money is a drug that he uses in a way that makes him feel better. Loads more on this in my book "The Path to Happiness and Wealth."

At this point I strongly believe that you have a duty, as the primary bread winner, to make sure you are on a savings plan immediately. Before all the "disposable" income vanishes, let's capture some in a savings account. Here is my simply plan to do just that.

As old-fashioned as this sounds, a little honest talk between the two of you is needed. Once you've read your homework reading I'm giving you here and you need a mediator to help with this conversation, schedule an appointment with me. The three of us can talk though this and find a path that works for everyone.

I really like the book below and think it would be a big benefit for anyone that wants some control over where their money vanishes to.

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Why Smart People Make Big Money Mistakes - and How to Correct Them: Lessons from the New Science of Behavioral Economics Why do so many otherwise smart people make foolish financial choices? Why do investors sell stocks just before they skyrocket - and cling to others as they plummer? Why do shoppers overspend when using credit cards rather than cash? What do our habits of tipping or buying lottery tickets indicate about our relationship with money? In this fascinating investigation of the ways we spend, invest, save, borrow, and waste money, Gary Belsky and Thomas Gilovich reveal the psychological causes - the patterns of thinking and decision making - of irrational behavior.

Hardcopy Version

Jaime Asks...

Q: Here's the situation -- a $40K vehicle was financed through a credit union, after 6 months there came the realization that that buying decision was the wrong one, the credit union said they would not transfer the title if the vehicle was sold and the debt paid from proceeds of the sale and credit card, the vehicle was returned to the credit union, the credit union sold the vehicle for $17K, the credit union is now trying to collect $23K. What can a person do in this situation?

A: Jamie, sounds like a straight forward repo to me. You can pay the amount you contractually owe, hire a lawyer to see if they can't find some really tiny loophole someplace or file bankruptcy if the debt leaves you in an unsafe place.

Here is a book that I love and the current version is always on my bookcase. The book contains information on repossessions that you may find helpful.

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Money Troubles: Legal Strategies to Cope with Your Debts Money Troubles provides both practical and legal strategies for getting out of debt and making a fresh start, including how to:• defend your property• create a workable budget• fix your credit• regain financial freedom.

Hardcopy Version

Your Money Coach For Comfortable Success,^sm

P.S. You can always enjoy my MoneyHelp radio show on the net. Here is the archive.