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Response to my request

February 26th, 2015 at 01:37 pm

After my post yesterday about the negative entries on my credit report, doingitallwrong suggested I send a letter to my creditors asking for a goodwill removal of the negatives from my credit history.

I have an ongoing relationship with one of the creditors, our credit union, where we have taken out two car loans over the past three years. I logged on to the CU site, and sent an e-message asking if they would remove the negatives. I based my letter on a template found on a link provided by doingitallwrong. Here's the response I received:

Thank you for contacting Credit Union via eMessage. We appreciate you taking the time to message us with your request. We greatly appreciate your membership with Credit Union and are happy to hear you have had such a positive experience with us. Although I am able to confirm you have had a very positive payment history with us in the recent past we are not able to reverse or remove late payments reported to the credit agencies unless they were reported in error. If the payments were reported late and it was not the result of an error on our part we are obligated to report them and are not able to remove them. Although we are not able to accommodate your request and remove late payments from your payment history, I would like to assure you that your credit history only reflects the last two years of your payment history. As the payments referenced in your previous message were between the years 2008 and 2011 they should no longer be reporting on your credit. If you have any additional questions or if we can assist you with anything else you are always welcome to contact us …

I struck out.

There is one other CC that has reported negatives. I cancelled that card a long time ago. I have no idea what my account number was. I do have a mailing address that appeared on my credit report, but the above mentioned credit union at least has the incentive of keeping my happy because of my continued business. The other company (Bank of America) really has no incentive to make or keep me happy. So, I doubt that I'll send a request to them.

There was really no harm nor foul in sending the request to the credit union.

Credit Maintenance

February 25th, 2015 at 07:23 am

I pulled my credit report yesterday. I don't pull my report often enough. I know that you can get a free report form each of the three companies once per year. So the best strategy is to pull each of the three every four months. I just don't do it often enough. It's probably been 12-18 months since I last pulled it.

What I've done is recorded the date and reporting company in the same spread sheet where I keep my budget, balance sheet, and amortization schedules. That way I can keep better track of when and where I pulled my last report, and keep on a better schedule.

I have a total of 17 negatives, from two credit companies on my report. The first has a string of 11 negatives ranging from May 2009 - March 2010, where I was 30 - 120 days past due. The other has a string from August 2008 - November 2008 where I was 30 - 90 days past due, plus March 2010, and October 2010 where I was 30 days past due. Note that I started becoming active on the SA forums around October 2010.

If negatives stay on a report for seven years, my first string of four will start dropping August through November this year. May of next year through March 2017 will see the end of the entire string from the other card, and the last negative will drop off October 2017. But, that's a long time from now.

According to my current Discover card statements, my credit score hovers between 720 and 725 any given month. It will be interesting to see how my score comes in as these negatives drop.

I also did something I should have done a long, long time ago. There were three open accounts listed that I don't use. One was a credit card I no longer use, one was a store card I opened when I bought a suit at a department store, and the third was an Amazon card I opened two Christmases ago. I called today, and had each of those accounts closed. We'll see what that does to my score.

This credit report monitoring is something I think I can and will keep up on from now on.

October Financial Reflections

October 1st, 2013 at 07:31 am

For the past couple of years I've done some extra financial reflection in the month of October. It was three years ago this month that we finally woke up, and started to pay serious attention to our finances.

A couple things happened that month. DW received a freelance check (that was in the days before four kids, and she did some freelance work). I think it was a couple thousand dollars. We also had our second of three sets of renters move into the our for sale house. I think the house had been vacant since July or August - a couple months anyway. We were also about $450 past due on one of our CCs. That CC had a whopping 32.99% APR.

Within the same week that we received DW's freelance check, we received a letter from the above mentioned CC. The CC company (Advanta) was offering us a deal - if we paid the $450 that we were past due, they would cut our interest rate to 16.99%. We jumped on the deal, and sent the check that day. Advanta kept their end of the bargain, and cut our interest rate. Most of the rest of DW's freelance check went to various other debts.

That bit of momentum got the ball rolling for us. I dug in, and totaled all our CC balances, compared the balances to each card's interest rate, and realized that (after the $450 payment, and interest rate cut on the one CC), we would still be paying very nearly $200 per month in CC interest alone.

The first step I opted to take was to find a 0% APR transfer to a new CC. My credit score was in a shambles, and I didn't qualify for a new card at that time. Another thought I had was to borrow against my retirement fund. I actually went to a bank, and picked up the forms to apply for the loan. I think they were offering an 8.99% APR on the loan. I don't remember for sure, but I may have filled out the paperwork, but I never did submit it.

That previous August, I had stumbled upon the SA forums when my mom and dad had a question for me about retirement savings. I had asked the question for them, and passed on the answers, and never did return to SA until I was faced with the question - should I borrow against my retirement fund to pay off CC debt (or, shift unsecured debt to a lower APR with my retirement fund as collateral, to be more precise). Thankfully I asked the question, and thankfully the forum regulars steered me away from that choice.

DW did qualify for a 0% APR 3% balance fee card that next January. The limit was $750. We transferred that, minus the 3% fee, and ended up doing two more balance transfers until the Advanta debt was paid off this past January.

It would be another six months before I found the Blog side of this site, and those of you who have been following my blog for most of the pat 2 1/2 years know the rest of the story in gory detail.

You also know that we've stumbled at times, and have had help along the way. But, as I remember that seemingly unbearable, rocky mountain that we faced three years ago, I can't believe that we've turned it around.

Adoption Credit

August 2nd, 2012 at 10:53 am


I've been inactive for quite some time, but I wanted to let you all know that our 13K federal adoption tax credit arrived in the mail this week, with interest. We deposited it, and the check cleared yesterday. Today we paid bills! $2,500 went to pay off our new front porch, $2,000 went to one of the credit cards, $5,000 paid off our van, $2,200 went to family members for Mort 2, and the rest went to our EF. Sure feels good!

Some of you may be tempted to critique how the money was spent. Please don't. (ie, more should have gone toward high interest credit cards) This was a balance of my wishes, DW's wishes, and sending money to family members with whom we have loans. Trust me, I know that paying off higher interest accounts makes more purely financial sense, but we feel an obligation to accelerate progress on family loans.

Revised debt repayment goal

April 3rd, 2012 at 06:16 am

Yesterday when I updated my monthly debt progress, I upped my monthly debt retirement goal from $1,000 to $1,050.

I was thinking about how that $1,050 number was pretty much pulled out of thin air. I didn't base it on anything other than my gut feeling that it was an amount I thought I could handle without stretching myself too much. I thought I should base that figure on something real. Like, my average monthly debt retirement over the past year. I've already confessed to over-analyzing things.

So, I went through my monthly debt retirement figures over the past year. I omitted the month where I got my tax refund, and I averaged the remaining months. And it turns out I came up with $1,052. Darn close to what my gut feeling was yesterday.

Is it really a good goal to match last years debt retirement? Probably not. So, I will set a new goal. My new goal is to pay off debt at a rate of 5% more than last year's average - or $1,105 per month principal payment.

Holding Pattern

February 8th, 2012 at 05:41 am

I feel as if I'm in a financial holding pattern.

DW checked the status of our federal refund last night. It's estimated that we will receive our refund on February 14. Plenty of time to pay our bills before the end of the month, but I want it NOW nonetheless.

Also, as I've mentioned previously, I opened a new CC for balance transfers. I transferred all of CC4 and part of CC 1. The transactions still haven't shown up. The new card stated that it could take up to two weeks for the tranfers to complete. This Friday will be two weeks for the transfer of CC4, and next Monday (I think) will be two weeks for the partial transfer of CC1.

Total credit line on new CC is $9K. I transferred $2,700 total from the two cards. That way I'm utilizing 30% of the new CC, which I've heard helps your utilization ratio for your credit rating.

Also on hold is the total state and federal refund because of someone else claiming DS1, and the adoption credit.

So, we wait. Good things will happen.

January Daily Interest

January 18th, 2012 at 11:22 am

For the month of January I will spend each day -

$2.48 on credit card interest

$3.16 on credit card plus auto payment interest

$20.65 on credit card plus auto payment plus mortgage interest.

I've been calculating these values for, I beleive three months now. My jaw still drops each time I calculate them.

Minimum CC payment compared to what's paid

December 13th, 2011 at 08:49 am

As of this month, to remain current on our credit card payments, the minimum payment is $549. What we will probably end up paying is about $630, or about $80 over minumum. Note that I've slowed down payback a bit this month, mainly because of extra Christmas spending and keeping some cash in reserve for the home heating bill. We also need to pay property taxes in February. (Never a lack of places for cash to go).

If we paid only minimum payments on CCs, it would take an estimated 28 months to pay off CCs. It's hard to estimate that because minimum payments can change (hopefully down) month-to-month.

If we paid the $630 that we'll be paying this month, it would take 24 months to retire the CC debt.

If we bumped that up by $100 to $730 per month, every month, it would take 21 months to pay off. Not a huge change in terms of months to pay off, but a difference in $160 in accumulated interest, as compared to a $630 payment.

I think we can manage an average payment of $730 per month over the next 12 months. Hopefully some months substantially over $730, no months less than $630, and definitely no months less than $549!

Interest Expense

September 12th, 2011 at 07:18 am

I started getting (more) serious about paying down debt last October. So, I was curious how much I had paid in interest on non-mortgage debt the year prior to getting serious compared to how much I've paid the year since. Here are my approximations. I think they're pretty close.

Nov. 2009 - Oct. 2010: $3,480 spent on interest.
Nov 2010 - Oct. 2011: $2,090 spent on interst. Of course, Oct. is a projection.

I then projected an estimate for the next year, based on current balances and payments. My total projection for the next year is: $1,240 spent on non-mortgage interest.

Each year, according to my estimates, I'll have spent about 60% of the previous year's total.

One thing my previous year's estimate does not include is late fees and bank over-draw charges. So my 2009-2010 estimate is probably even greater than $3,480.

Year to Year Interest Comparison

August 30th, 2011 at 05:51 am

I was clicking around on the website for one of my credit cards - the big one with the $8,500+ balance. I found a page that listed the amount of interest I paid last year - $1283.46.

The page also listed the amount of interest I've paid year-to-date - $714.40. That prompted me to project the amount I'll pay for the remainder of the year. I project another $251 in interest - if I only pay the minimum due. Totalled together that's $965.40.

Or $318.06 less than last year on that card.

Or 75.2% of what I paid last year on that card.

Two things have happened with this card: 1) of course, I've been paying down the balance, and 2) the interest rate dropped from 12.9% to 8.9% in June.

Of course - reality is that I'll still have paid a thousand bucks in interest on this card by the end of the year. That sucks, but things are moving in the right direction.

More Financial Ratios

August 29th, 2011 at 06:09 am

Here are a couple more financial ratios that I've calculated.

The first is the minimum payments for all non-mortgage debt (credit cars plus van loan) that we owe divided by monthly (after tax) income. So, it's not necessarily what I pay, because I've been paying more than minimum, but I's what a bank would calculate if I went in for a new loan. My non-mortgage debt payment to after tax income ratio is: 13.7%.

The second is the same calculation, but I include my mortgage debt. That ratio is: 33.4%.

I would feel a lot better if that first calculation was less than 9%, and the second calculation was less than 30%. Actually, I would feel a LOT better if the first calculation were 0. There are, of course, two ways to improve those calculations - boost income or reduce debt (or stretch out payments, but I don't want to go there).

I've read that mortgage companies will approve loans that make your total debt to income ratio up to (and even beyond) 40%. That's scary. Things would be pretty tight if 40% of our income were going to debt repayment.

My Credit Card

August 19th, 2011 at 06:00 am

I wrote a couple of weeks ago about getting a new credit card. The main reason for the new card was to transfer my very high (16.99% APR) rate card to take advantage of the 6 mo. introductory 0% rate.

I've started using the card. Thin ice - I know. But, I'm resticting purchases to gas, groceries, and work items for which I will get reimbursed. I will pay off all purchases each month plus the predetermined amount to pay off the transferred amount over the time-frame I've set up.

The reason I'm using the card is so that it will remain active, and help boost my credit score for credit utilization.

So, I'm using a credit card again, after a three-year fast. We'll see if I can discipline myself this time. I think the chances are pretty good.

My CC Debt to Retirement Savings ratio ... again

August 9th, 2011 at 05:55 am

After yesterday's post, I found myself fixated with my debt to retirement fund calculation. I ran a projection. I assumed my monthly contributions to my retirement fund plus modest gains (thanks again, congress) plus my projected decrease in CC debt.

I project that by March 2012, my ratio should be 14.6%. Of the three factors I mentioned, (contributions, fund growth and CC reduction), I have control over two of them. My contributions are pretty much fixed at 15% of salary. I could increase contributions, but I probably will not. I have absolutely no control over the market. The one factor I can really work on is CC reduction.

Let's see if I can continue to whittle down on CC debt, and meet my short-range goal of a 14.6% CC debt to retirement fund ratio.

My CC Debt to Retiremt Savings Ratio

August 8th, 2011 at 05:43 am

This isn't a real financial benchmark ratio, as far as I know. But, 5 years ago, it was about 100%. In other words, I owed about as much on credit cards as I had saved toward my retirement - $30,000.

I calculated this ratio again, and it is now 20%, even with the pathetic performance of my retirement fund over the past several weeks (thanks, congress). Or, for every dollar I have saved towards retirement, I owe twenty cents in credit card debt.

Of course, my goal is to have that ratio down to zero.

August Debt Update

August 1st, 2011 at 06:04 am

Beginning of the month update on my debts.

Mort 1 - $104,748 $738/mo. 6.25%
Mort 2 - $70,000 $0.00/mo. 0.00%
CC 1 - $8,553 $176/mo. 8.90%
CC2 - Balance transferred to CC6 @ 4% balance transfer fee.
CC3 - $3,092 $140/mo. 5.25%
CC4 - Paid in Full
CC5 - $2,639 $195/mo. 5.32%
CC6 - $2,172 $60/mo. 0.00% through January 2012
Van Loan - $7,111 $210/mo. 4.02%

Difference from last month - $997.

Learned my credit score

July 27th, 2011 at 07:24 am

Last October, my credit score was a fiasco. It was 580. I asked on the forums how long it would take to raise my score up to a respectable level. No one could really answer the question.

Well, I applied for a new credit card for a balance transfer. Apparently part of the new credit card reform law is that credit companies need to provide you with your credit score. Mine is now 667.

So, over the course of 9 months of faithfully paying bills on time, and whittling down debt, my credit score has improved by 87 points. That's close to 10 points per month. Maybe by the end of the year, I'll be looking at a 700 credit score.

CC Balance Transfer

July 20th, 2011 at 10:34 am

I applied and was approved for a new credit card yesterday. Yikes! I haven't had one of those in three years. I'll not use it for any purchases, only a balance transfer of CC#2 - the 16.99% APR monstrosity.

Some stats: My credit limit will be $5,000. So, less than half of the limit will be taken up by the transfer. The balance transfer charge is 4% of the amount transferred. The six month introductory APR is 0.0%. Then, it increases to a rate between 9.99% and 20.99%. Ouch and ouch. I don't know yet what the APR will move to, but will find out when I receive the card and details in the mail.

Some calculations: Best case scenario is to have the entire balance paid off by next March - With a 9.99% APR. If I (we) can do that, I project that we can save $127 over what we would have paid in interest by keeping the balance where it is. If the interest rate spikes up to 20.99%, and I don't have the balance paid off until next April, we'll save $43 over keeping it where it is.

If the balance is not paid off until May 2012, at a 20.99% rate, I will go backwards $24. If the rate goes to 9.99%, I have until July 2012 before I go backwards.

It may seem like an awful lot of hassle just to save $127 over the course of 8 months. It probably is. But, I feel as if I've waged an all out war against credit card debt, and every small victory is a step closer towards my ultimate goal of being credit card debt free.

I will shred the card as soon as it arrives in the mail.

Drop in interest rate

July 8th, 2011 at 05:36 am

The interest rate that we pay on CC 1 dropped last month. It was 12.9% APR prior, and it dropped to 8.9% APR. That's about $30 less in accumulated interest per month. We didn't even have to call to ask for the rate change. I guess it has to do with the fact that we've faithfully paid that card, and all of our other obligations each month since October, and our credit scores are improving as a result.

An 8.9% APR is still highway robbery, but it sure beats 12.9%!

July Debt Update

July 7th, 2011 at 08:08 am

It's been a while since I've posted an entry. I'll give an update on our total debts.

Mort. 1 - $104,941 $738/mo. 6.25%
Mort. 2 - $70,000 0/mo. 0.00%
CC 1 - $8,666 $176/mo. 8.90%
CC 2 - $2,278 $57/mo. 16.99%
CC 3 - $3,309 $140/mo. 5.25%
CC 4 - Paid in Full
CC 5 - $2,822 $195/mo. 5.32%
Van Loan - $7,296 $210/mo. 4.02%

I feel as though we're making good progress on credit card #2 with the exorbitant 16.99% APR. My goal will be to have it completely paid off over the next 12 months, while making minimum payments on everything else.

Keep in mind that the $XX/mo. figure above is the minimum amount due for each account. So, CC 2 is $57/mo. minimum due, but in May, we paid $134, in June, $143 and this month $230.

How we got here: Chapter 2, The Dual Income No Kids Years

April 22nd, 2011 at 04:40 am

To bring you up to speed from our last chapter, DW and I started married life together in 1996. I was 23, she was 21. We were carrying total debt of about $13K between CCs and SLs.

This next chapter of our life can be summed up best with the following phrase: FINANCE IT!

We bought a car in 1997. FINANCE IT!

We bought an $87K house in 1998. We had a pittance for a down payment, but the mortgage payment was going to be very similar to our rent payment. FINANCE IT! with an FHA loan.

We needed a water softener for the house. The well water was rusty. FINANCE IT!

We needed a tough and rugged Cub Cadet riding lawn mower for our 1.5 acre lawn. FINANCE IT!

We needed a glass top stove. FINANCE IT!

The very old and undersized furnace for our house gave up. We decided we needed a much bigger high efficiency furnace. FINANCE IT!

We needed a new computer somewhere in there. FINANCE IT!

I needed another beater vehicle to drive back and forth to work. It cost $2,100. We didn't have the cash. FINANCE IT!

Between all the financing we did, we kept up on the payments. By the end of year 2000, we were making a combined approximate $80K. But what we did do is allow credit cards to make up the cash flow shortage. We also ate out. A LOT. We were busy professionals, and it was just easier after a long day to pay someone to make the food and wash the dishes. I guess we really didn't need that glass top stove after all.

I'm not really sure where our CC debt was during this period. My head was snugly buried in the sand. But, my best guess was that it was about $25K. Somewhere in there, a payment or two or three WERE missed. The interest rate on one of the card skyrocketed to 25.99%

We did start to get somewhat serious about debt repayment at this point. We stopped buying things. We didn't really stop going out to eat. But between 2000 and 2002, we started to retire some debt. A lot of it was done by shuffling debt to lower introductory rate cards, and home equity loans. But we also took bigger chunks out of the debt each month.

Then enter the next phase of our life: kids

How we got here: Chapter 1, The Early Years

April 21st, 2011 at 05:47 am

DW and I met at Michigan State University. I was a junior, she was a sophomore. We both come form rural communities in Michigan. We both have frugal parents. DW's 1,500 acre - 160 dairy cow family farm is debt free. My folks have had their home mortgage paid off for for more than 10 years. They are 60 and 62. But we're from a different generation, aren't we?

I got my first credit card when I was 22. I "had" to get one, you see. I was getting married. It all started when I was buying the engagement ring. I was a college student. I bought it for $1,000 - no financing for 12 months. The salesman said "at the end of the 12 months, just slap your balance onto another card". Yeah, right! I'll have it paid off by then. Well, I didn't. I'm not sure what the interest rate would have been on the ring, if I had kept it financed with the jeweler, but I was enticed to open up a credit card at that point. I don't even remember how much of the ring balance was left to transfer, but it seems like it was around $300. What I do remember very clearly was that the minimum due on my first bill was $20. $20! You've got to be kidding me. I know I paid more than the $20, but I sure didn't pay it off the first (or 13th) month, whichever way you want to look at it.

I also started to accrue Student Loan debt in this same period. My first two years of college, I managed to pay as I went. Between what I had saved up in high school, what my parents gave me, and different student jobs I worked, I kept up with the tuition, books, housing and beer money. Then, when I was a junior, I was tapped out. Mom and Dad still helped. I still worked. But I had to borrow some money. Over the next two and a half years (I graduated in 4 1/2 years) I borrowed a total of $8,000 in subsidized student loans. Not bad and not all that great either.

DW had a grand total of $0.00 in SL debt. She got a full-ride scholarship to MSU.

Then comes the wedding. This was 1996. You hear about weddings that cost $11,000 or $20,000. Not us. We spent more around $3,500. It was a nice wedding. It was at my in-laws farm. We rented a tent and roasted a pig. Parents picked up a chunk of the bill, but a large chunk on - you guessed it - credit cards.

When it was all said and done, we started married life out with about $11 or $12K in debt, including credit cards and student loans. Our assets consisted of two beat up cars and two college educations. No worries - we're about to hit the job market. We'll have these bills paid in no time!

Credit Card Personalities

April 20th, 2011 at 04:32 am

Sometimes when I think my credit cards, I assign certain personalities to each of them.

Let's take CC 2 - It has the lowest balance of any of my debts, but also has the highest interest rate at 16.99%. When I envision that debt in my mind, I come up with sort of an imp or a gremlin. He is green with a sinister smile and razor sharp teeth. He jumps around a lot and chews stuff up and just plain creates a mess of things.

Then there's CC 1 - Also a high interest rate - 12.9% and a fairly hefty balance at nearly $9,000. When I think about him, I see a slow moving giant with a big club. He kind of swings that club around a lot and crushes my finances.

CC's 3 and 5 have lower interest rates - in the 5% range, They are like two overgrown, clumsy kids, kind of tripping on things an knocking stuff over, but creating spills that I can tend to. I'd just rather be doing other things with my time (or money) so to speak.

Not sure if this sounds weird or not, but I sure like knocking teeth out of the gremlin, giving the giant a bit of a smaller club each month, and helping the kids learn to mind their manners!

My first Blog Post!

April 18th, 2011 at 06:40 am

I'll begin my first blog post by summarizing a recent post I made in the forums.

Debt is Nov. 2010

Mort. 1 - $106,600 $988/mo. 6.25%
Mort. 2 - $70,000 0/mo. 0.00%
CC 1 - $9,376 195/mo. 12.90%
CC 2 - $3,530 $150/mo. 16.99%
CC 3 - $4,330 $140/mo. 5.25%
CC 4 - $1,090 $310/mo. 5.78%
CC 5 - $4,255 $225/mo. 5.32%

Current Debt
Mort. 1 - $105,500 $738/mo. 6.25%
Mort. 2 - $70,000 0/mo. 0.00%
CC 1 - $8,934 $183/mo. 12.90%
CC 2 - $2,848 $68.50/mo. 16.99%
CC 3 - $3,862 $140/mo. 5.25%
CC 4 - Paid in Full
CC 5 - $3,336 $195/mo. 5.32%
Van Loan - $7,894 $210/mo. 4.02%

Debt to Asset Ratio - 77.6% (or I owe creditors more than 3/4ths of the value of my total assets)

Non-Mortgage Debt Payment to After Tax Income Ratio - 18.1% (or nearly 1 out of 5 of my after tax income dollars go toward paying off credit cards and a vehicle)

Total Debt Payment to After Tax Income Ratio - 33.5% (or just a smidge more than 1 out of 3 of my after tax income dollars go toward paying off all debt)

The house that mortgage #1 is held against is for sale. We no longer live in it. It is rented out for $725/mo. It is more than 200 miles away from where we live now.

The house that mortgage #2 is held against is where we live. It is my family's original farmstead. We borrowed money from a couple of family members, and we'll need to repay it after house #1 sells.

And then there's the credit card debt. Nearly $19,0000 worth. We're working away at knocking that out. And the van loan.

Well, this is a start. Nothing in the way of new info that I haven't already included in the forums up to now, but if I keep up with this blog, I'll try to not only keep track of where I'm going, but how we got here in the first place.