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sourcheese
New Poster
Cash: $ 0.45
Posts: 2
Joined: 20 Aug 2006
Location: mass
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| charge offs from when I was in school, now make $75000 advic |
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My current credit rating is 566 aprox with 6 charge offs. My long term
goals are to own a house in about 7 years, and short term goal to
finance a 33000.00 suv around june 2007.
Here are the facts.
About 7 years ago I was in college, on my own and ended up in debt up
to my eyeballs.
Now Im a nurse, same place for 2 years so far and making good cash, and
finally independent. I love my job, my coworkers, patients and manager respect me. So I have no problem with tons of overtime, and its always available.
Unfortunatly I have about 6 charge offs with my first account in 1999,
and the rest from 2002. I owe aprox 25000, with 12000 of it from
student loans. I payed off 2 charge offs so far, and am working on a third.
My student loans will no longer be in default status as of april, and I
am now working 6 night shifts a week until aprox july 2007. I have 2
small credit cards I obtained in may 2006 that I havent missed a payment on, and I also have a small car loan from may 2006 I havent missed a payment on.
By june 2007 I can pay off all my debt, but it would leave me with less
than 5000 saved, and Im under the impression that the charge offs will
stay on my report for another 7 years once paid off.
Should I do that? or should I pay off the charge off Im working on now,
wait for my loans to no longer be in default status, and just save till
june to put a downpayment on a car. In doing this I would ignore my
charge offs from 2002, and wait for them to be off my record. I dont need additional credit cards, I am good with a budget now, all I want is the suv in 2007 and house later.
which plan is smarter financially in the long run? Which will help my credit enough for a house in the long run?
Thank you
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Sun Aug 20, 2006 3:33 am |
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sourcheese
New Poster
Cash: $ 0.45
Posts: 2
Joined: 20 Aug 2006
Location: mass
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reason for the car is to build up my credit while I pay it off for a house after. Also its what I want. I already have money being put away for a 401k, and I have money being put away in a mutual fund on top of that, so Im not completly retarded when it comes to long term.
Also because I want a vehicle Im proud of. Ive busted my ass my whole life and come from complete and utter poverty from my parents and I deserve something nice.
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Sun Aug 20, 2006 7:35 pm |
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coaster
Senior Advisor
Cash: $ 1355.60
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Joined: 11 Oct 2005
Location: Wisconsin
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You don't need to buy a car to build credit. Just using and faithfully paying off your credit cards will do that, as well as eliminating your debt. You're going to be socked with a high interest rate on your car loan. The financially prudent course of action is to defer the vehicle purchase as long as possible; preferably until your debt is discharged. Don't reward yourself until the game is won. You'll have plenty of time and opportunity later in life to indulge yourself if you just put a lid on it now. You're already ahead of many people just by considering your alternatives. I think you know what you need to do. Just suck it up and do it and later you'll be amply rewarded for doing the right thing now. 
~Tim~
Eye Candy : Why Whimsy
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Sun Aug 20, 2006 8:34 pm |
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rockhound
Preferred Member
Cash: $ 26.45
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Joined: 03 Feb 2006
Location: West Virginia
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quote:
Originally posted by sourcheese
reason for the car is to build up my credit while I pay it off for a house after. Also its what I want. I already have money being put away for a 401k, and I have money being put away in a mutual fund on top of that, so Im not completly retarded when it comes to long term.
Also because I want a vehicle Im proud of. Ive busted my ass my whole life and come from complete and utter poverty from my parents and I deserve something nice.
I haven't posted in a long time, but felt compelled to because I can empathize with your case. I also grew up poor, put myself through college, and wanted to reward myself by buying a new luxury car. However, the car you drive does not define your worth as a person. I drive a beat-up, rusty old truck with 250,000 miles, and every few months have to spend time laying under it wrenching on something to keep it going. I've had it for 10 years, and every month it stays on the road is money saved in my pocket that would have been blown on a car payment. Money that made enough extra payments on my house to wipe out $110,000 of mortgage interest, and turn my 30-year mortgage into a de-facto 10-year mortgage. Do I worry that people might think I'm a loser when they see me in my old smoking, rattling truck? Well, considering that my retirement plan is well funded, my house is nearly paid off, I'm nationally known in my field, have a doctorate, and have a $100k emergency cash fund, I really couldn't care less what they think. Just imagine--the $33,000 (+36k by the time you pay the interest) you would spend on the car would wipe out your debt and put you in a whole new financial situation if you can just hold off a few years. You know what poverty is, and buying an expensive new car with $25k in debt and spotty credit history is not taking you farther from it. When your debt is paid off, and you're in your own house with some cash saved up, maybe you'll feel like you've earned that car a little more. However, if you really want it, then nobody can stop you from buying it.
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Fri Aug 25, 2006 1:31 am |
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coaster
Senior Advisor
Cash: $ 1355.60
Posts: 6675
Joined: 11 Oct 2005
Location: Wisconsin
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A personal story is always more convincing that the best arguments. Thanks for sharing that. And, hey, how about posting more often? 
~Tim~
Eye Candy : Why Whimsy
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Fri Aug 25, 2006 2:33 am |
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JCook
Full Member
Cash: $ 11.20
Posts: 56
Joined: 24 Jan 2006
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Sourcheese,
I'm jumping in here to reiterate what you have already been told by the previous two posts and I hope that the volume of these responses urges you to keep up the good work.
You are on the right track and buying a 30+k SUV would be a major step in the wrong direction. Your record of paying off debt and the hefty down payment that you can have saved up will make the home mortgage in 7 years a breeze.
Just put your head down and keep doing the right thing.
http://www.financeforfamilies.com
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Wed Aug 30, 2006 2:52 am |
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