Credit??

[Living day by day]

My fiance has poor/marginal credit. I have good credit, but not outstanding. How do we go about starting our life together? How can I help him fix his credit? We are just out of college and he has not been the promptist at paying bills. Also neither of us is really sure what are "rules" of bank/credit and vendors, etc. Like I though if you put a date on a check you could not cash the check until that date. Well rent bounced. Where do you learn this? Trial and error maybe to late to help us.

[Tony T]

YOU ASK:

 

1. "I have good credit, but not outstanding. How do we go about starting our life together?"

 

Well, first of all you have to decide if you even want a longterm relationship with someone who is financially irresponsible. Love does not last very long living on a shoestring. Ask any of your married friends. One of the TOP reasons for divorce is related to money and mostly the lack of it.

 

I wouldn't touch this guy if I were you until he straightened out his financial act and showed you he was committed long term to the responsible conduct of his fianancial affairs.

 

2. "How can I help him fix his credit?"

 

Well, on a temporary basis you could pay all of his bills. But that wouldn't straighten out what's already on his credit bureau report. Late payments remain on your credit report for seven years. Unless there is a mistake of fact on that report, there is no legal way of "fixing" it despite what all these ads about "credit repair" say. Those are a lot of crap!

 

3. "We are just out of college and he has not been the promptist at paying bills. Also neither of us is really sure what are "rules" of bank/credit and vendors, etc."

 

Well, I sort of deduced that he didn't pay his bills promptly when you said he had credit problems.

 

First, he needs to get a job that will allow him to pay all his bills promptly each month. He should work off a strict budget and maybe you can help by taking over his financial affairs and giving him an allowance for his personal expenses...if you think you can do a better job that him.

 

There is only one "rule" of bank/credit and vendors...that is, pay your bill or make your scheduled payment before the due date. Simple as that. If you can't live up to that rule, or agreement you made when the credit was extended or merchandise was accepted, call the credit card company or vendor and explain your circumstances. Stay in touch with them. Don't avoid their calls.

 

If he is so mired in bills that it is crippling him and you think he could do much better if he had a fresh start, he should see an attorney about filing a Chapter 7 Bankruptcy in Federal Court. It isn't all that expensive to do and you can take a lot of weight off your shoulders if you have a lot of debt you can't manage. As a matter of fact, there are books that tell you how to file yourself without an attorney. The court filing fees are in the neighborhood of $300.

 

4. "Like I though if you put a date on a check you could not cash the check until that date."

 

People expect checks to be good when they receive them. By writing a post dated check (which is what you did), you are giving the receiver notice that you do not have sufficient funds in your account to handle the check at that time. (There are other reasons people do this but we don't have to go into that now, it's irrelevant to your situation)

 

Never, ever give anybody a check until you know it's good. Now, you may tell a close friend to hold a check and expect them to honor that request. But most other people won't do it. They figure there is a limited amout of money in your account and they want to get the money from your check FIRST so that others won't beat them for the limited amount you have.

 

Bank operations centers don't even look at the date on any check....or even the signature for that matter. Can you imagine a clearing center processiong millions of checks every night having to look up and check every signature? All they look at is the account number and the amount. You better get used to the new world. It's big, it's impersonal, and it moves very fast.

 

5. " Well rent bounced. Where do you learn this? Trial and error maybe to late to help us."

 

Parents should teach financial strategies but these days parents are way too busy with more important things to do much raising of their children. It's tragic.

 

Financial planning and handling of daily finances is almost a matter of good common sense. If you have $1,000 per month clear after taxes at your disposal, you just have to make sure you live a lifestyle where you can buy clothes, pay rent, make your car payment, buy food, spend on entertainment, etc., etc. and it won't be over $1.000.

 

Now, if you use a credit card or cards to make of the difference every month, something's gotta give sooner of later. You can't do that forever. It's nice when a relative sends you money and you can pay those down. Otherwise it's insane to use credit cards or any other kind of credit to pay living expense.

 

It's even crazier to charge meals in restaurants and make monthly credit card payments on them. You are actually making payments on food that has long been passed through the body, digested and the waste of which has already been handled at the sewage treatment plant.

 

Your best bet is to go to a good bookstore and look over some books on personal finance. Some colleges offer non-credit courses you can take on handling personal finances. And in most major cities there is a consumer credit counselling service that will help you figure out a financial strategy to get you out of the whole.

 

I'll also give you a hint that can make you very, very wealthy one day. Make it a habit of putting away ten percent of EVERY DOLLAR you ever make or receive. Put it in an interest bearing bank account. I unconditionally guarantee that at least once in your lifetime there will be an opportunity for you to become a multimillionare by investing the cash you have saved. Just do it very wisely.

 

But if you don't learn anything else from what I've said, you have to understand MARRIAGE IS A BUSINESS!!!! It's a business where love is the basis but it is nevertheless a business. When you finally get married, you become THE MR. AND MRS. CORPORATION. That's right. A big part of marriage is financial. You find that out when you come down from the cloud nine of romantic bliss. And NOTHING can take you down faster than bills piling up and no money to pay them. It's pathetic.

 

If you or your guy can't get the financial thing worked out, the relationship will never work. It will go bankrupt...down the tubes.

 

Read some books, take some courses, get a calculator to keep your bank balance accurate, write no more post dated checks, do advanced planning so you have the money to pay all your bills, take your scissors and cut up all the credit cards, live within your means and God Bless You!!!

[Paul]

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