Fixing my credit after a wage garnish..
February 9, 2010 9:00 PM Subscribe
Any advice on minimizing and reversing the impact of a wage garnish on my credit?
So after college and professional school, I prudently decided to consolidate all my loans (about $120k) at a great interest rate, and went about my business paying these back, or when appropriate, deferring due to being back in school. Or so I thought. Apparently some small loan ($4,000) didn't end up in the consolidation, and despite multiple attempts by the lender to contact me, I never got wind of this information until I noticed that a wage garnish was started, affecting my credit. I take full responsibility for this as I failed to set up an appropriate forwarding address for some mail, etc. etc. In any event, I have the money to pay this thing off in its entirety, no problem. What if any is the best way to minimize or undo the damage this may have done on my credit?
Forgive me for not knowing the obvious. I am a credit moran. Please hope me!
So after college and professional school, I prudently decided to consolidate all my loans (about $120k) at a great interest rate, and went about my business paying these back, or when appropriate, deferring due to being back in school. Or so I thought. Apparently some small loan ($4,000) didn't end up in the consolidation, and despite multiple attempts by the lender to contact me, I never got wind of this information until I noticed that a wage garnish was started, affecting my credit. I take full responsibility for this as I failed to set up an appropriate forwarding address for some mail, etc. etc. In any event, I have the money to pay this thing off in its entirety, no problem. What if any is the best way to minimize or undo the damage this may have done on my credit?
Forgive me for not knowing the obvious. I am a credit moran. Please hope me!
The very best thing you can do is pay it off. Any responsible lender approving a loan for you is going to require that you take this step anyway and if you have the money, you should pay the debt and stop the garnishment. Then, make sure you get a written satisfaction for the debt as well so that five years from now, when it still pops up on your credit report occasionally, you can show that it was paid. Sadly, there is nothing you can do to get rid of it entirely except wait a few years when it will fall off on its own. That is, unless you sweet talk the original credit grantor to remove it-but good luck with that, it's rarely a successful effort.
posted by supercapitalist at 6:14 AM on February 10, 2010
posted by supercapitalist at 6:14 AM on February 10, 2010
Agreed. Pay it off now, then wait for the item to age off, is probably the best you can do. I'm assuming since it went as far as wages being garnished, a court was involved, so there is probably a judgment on your report. You can always get a copy of your report to double-check. If there is, it's a public record, it's not something either you or the vendor are likely to have the ability to negotiate away.
People obsess a lot about credit scores nowadays; but if an actual human being is reviewing your report, and there's a court judgment there from a few years ago that was paid in full, and it's the only "bad" thing there, in many cases they'll just ignore it. The big concern with a judgment is if it's unpaid, which could mean a court could very soon garnish your wages or attach your assets, which could affect your ability to pay other debts. Paid judgments don't imply any imminent threat. And if someone is calculating a debt-to-income ratio, a paid judgment is zero debt.
Otherwise, just do the things people normally do in life: charge things on credit cards, buy a car, and so on, and make payments on time. The good will help counterbalance the one negative. People in online forums will have more fine-grained advice, some of it good, no need to go overboard, of course.
posted by gimonca at 6:50 AM on February 10, 2010
People obsess a lot about credit scores nowadays; but if an actual human being is reviewing your report, and there's a court judgment there from a few years ago that was paid in full, and it's the only "bad" thing there, in many cases they'll just ignore it. The big concern with a judgment is if it's unpaid, which could mean a court could very soon garnish your wages or attach your assets, which could affect your ability to pay other debts. Paid judgments don't imply any imminent threat. And if someone is calculating a debt-to-income ratio, a paid judgment is zero debt.
Otherwise, just do the things people normally do in life: charge things on credit cards, buy a car, and so on, and make payments on time. The good will help counterbalance the one negative. People in online forums will have more fine-grained advice, some of it good, no need to go overboard, of course.
posted by gimonca at 6:50 AM on February 10, 2010
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posted by salvia at 10:02 PM on February 9, 2010