Divorce after Twenty years together Community Group
I want to start something for those of us that were married for a long long time. I think that we face a little different issues than those who were dating for a few years or even married for shorter period of time. Being married for so long we have older children some have grandkids dealing with teenagers and their reaction to the divorice empty nesters dating after 40...
While reading the responses to REPO HELL on here, I realized that I have the opposite -- but just as troublesome -- problem with credit. Here it is:
Last summer, my financial advisor told me that it would be a good idea for me to update my credit rating since my divorce been final for over three years. At the same time, Tom and I were just starting to look at property in North Carolina; selling this farm and relocating in the next year or three. My advisor suggested that I apply for a Home Equity Line of Credit as a way to establish some new "credit experience" since my divorce had been final since March 2007. A HELOC carries with it a certain amount of "clout" in the financial world for a number of reasons; among them that simply by having one, your credit RATING goes up whether or not you ever actually use the HELOC account. So I applied.
With a Credit Score of 770 (out a possible 844), no debt, sizeable liquid assets, and this farm (which the bank appraised at close to half a million dollars), I was shocked when the bank denied me the loan. The reason? "Because I have no recent loan repayment experience." So, welcome to Catch 22 -- I'm sitting here pondering how can I get "recent loan repayment experience" if I can't get a loan! WTF?!
Now here's a little background:
The X and I always made sure that we had established and maintained a good credit rating. We bought our first little house in 1982, the year we were married. Six years later, we bought this farm. It was a stretch for us, and we were scared to death because we still hadn't sold the little house, but we rented it for a couple of years and then put it back on the market. It sold fairly quickly. That off our minds and out of our pocketbook, we doubled up on payments and refinanced just once, which enabled up to pay off the original 30-year note on this place in just 12 years. We had a Mortgage Burning picnic to celebrate in July 2000.
In our entire 30 years together, we never bought brand-new cars (because of the depreciation hit the minute you drive them off the dealer's lot). Instead, we paid cash for "slightly used" ones -- dipping out of the savings that we contributed to on a steady basis. We used our joint VISA credit card account for everything and paid the balance in full every month, as a way to streamline monthly bill paying and rack up miles with American Airlines. Our operating creditors (utilities, phone, etc.) were also paid on time and all accounts were always up to date. We had established a HELOC in 1995 and used it to bump out and remodel the kitchen here and to build a detatched 3-car garage and workshop. Paid back the HELOC quickly, as well. When the divorce was finally final, the X had to pay back the $90k he had snatched out of the HELOC and he signed to remove his name from it. I refused to do so and the bank said that I would now be responsible for repaying any monies that I chose to use out of it.
Six months later, the bank was sold. The new bank says "We have no record of any of that." I say bull! but what's a cowgirl to do? Didn't give it much thought until last summer.
Fast forward to now. In the almost four years since the divorce was final, I haven't bought anything that I couldn't pay cash for. When I had some major repair and improvement things done to the place, I used some of the cash I received in the settlement to pay for it. I always thought that was the way to do things...but apparently, the rules of the financial world have changed -- or something!
I don't like having debt, and swore that I was never going to go into debt again if I could help it. I believe that most people -- regardless of their marital status -- want to be debt-free by the time they reach retirement age and then STAY THAT WAY. I will be 58 in March, so I'm not too far from "retirement age." If I'm careful with what I have, I shouldn't have to go to work full time or change my current lifestyle for the rest of my life. I always thought the GOAL was to retire DEBT-FREE!
However, this Catch22 thing has really got me stymied. I asked the guy at the bank, "So what do I have to do to establish some recent loan repayment experience?" He says, "Go buy a new car." I said, "I NEVER buy brand new cars; I don't need a different car at this time and, besides, I really like the one I have!" I'm not about to go out and run up a debt for something that I don't want or need.
So what's a Cowgirl with a high Credit Score, available cash and "no recent loan repayment experience" to do? Is there a banker in the house?
Last summer, my financial advisor told me that it would be a good idea for me to update my credit rating since my divorce been final for over three years. At the same time, Tom and I were just starting to look at property in North Carolina; selling this farm and relocating in the next year or three. My advisor suggested that I apply for a Home Equity Line of Credit as a way to establish some new "credit experience" since my divorce had been final since March 2007. A HELOC carries with it a certain amount of "clout" in the financial world for a number of reasons; among them that simply by having one, your credit RATING goes up whether or not you ever actually use the HELOC account. So I applied.
With a Credit Score of 770 (out a possible 844), no debt, sizeable liquid assets, and this farm (which the bank appraised at close to half a million dollars), I was shocked when the bank denied me the loan. The reason? "Because I have no recent loan repayment experience." So, welcome to Catch 22 -- I'm sitting here pondering how can I get "recent loan repayment experience" if I can't get a loan! WTF?!
Now here's a little background:
The X and I always made sure that we had established and maintained a good credit rating. We bought our first little house in 1982, the year we were married. Six years later, we bought this farm. It was a stretch for us, and we were scared to death because we still hadn't sold the little house, but we rented it for a couple of years and then put it back on the market. It sold fairly quickly. That off our minds and out of our pocketbook, we doubled up on payments and refinanced just once, which enabled up to pay off the original 30-year note on this place in just 12 years. We had a Mortgage Burning picnic to celebrate in July 2000.
In our entire 30 years together, we never bought brand-new cars (because of the depreciation hit the minute you drive them off the dealer's lot). Instead, we paid cash for "slightly used" ones -- dipping out of the savings that we contributed to on a steady basis. We used our joint VISA credit card account for everything and paid the balance in full every month, as a way to streamline monthly bill paying and rack up miles with American Airlines. Our operating creditors (utilities, phone, etc.) were also paid on time and all accounts were always up to date. We had established a HELOC in 1995 and used it to bump out and remodel the kitchen here and to build a detatched 3-car garage and workshop. Paid back the HELOC quickly, as well. When the divorce was finally final, the X had to pay back the $90k he had snatched out of the HELOC and he signed to remove his name from it. I refused to do so and the bank said that I would now be responsible for repaying any monies that I chose to use out of it.
Six months later, the bank was sold. The new bank says "We have no record of any of that." I say bull! but what's a cowgirl to do? Didn't give it much thought until last summer.
Fast forward to now. In the almost four years since the divorce was final, I haven't bought anything that I couldn't pay cash for. When I had some major repair and improvement things done to the place, I used some of the cash I received in the settlement to pay for it. I always thought that was the way to do things...but apparently, the rules of the financial world have changed -- or something!
I don't like having debt, and swore that I was never going to go into debt again if I could help it. I believe that most people -- regardless of their marital status -- want to be debt-free by the time they reach retirement age and then STAY THAT WAY. I will be 58 in March, so I'm not too far from "retirement age." If I'm careful with what I have, I shouldn't have to go to work full time or change my current lifestyle for the rest of my life. I always thought the GOAL was to retire DEBT-FREE!
However, this Catch22 thing has really got me stymied. I asked the guy at the bank, "So what do I have to do to establish some recent loan repayment experience?" He says, "Go buy a new car." I said, "I NEVER buy brand new cars; I don't need a different car at this time and, besides, I really like the one I have!" I'm not about to go out and run up a debt for something that I don't want or need.
So what's a Cowgirl with a high Credit Score, available cash and "no recent loan repayment experience" to do? Is there a banker in the house?
There is so much b.s. in this whole banking thing and credit worthiness thing it makes my head spin! First of all, I DID provide them with a copy of the page of my divorce settlement (you know, the IRONCLAD ONE) that states the amount and duration of my Alimony, together with copies of bank statements that show the regularlity and reliability of such payments; copies of my IRS returns for the last 3 years that CLEARLY show Alimony as income (there's a special box for that on Page 1). I also documented the fact that I could put my hands on $100,000 CASH at any given moment without touching my IRA or ROTH accounts. And it was their appraisal that showed my place as being worth $500,000. I think with a CREDIT SCORE of 770 (out of a possible 844) -- AND THIS IS CURRENT -- I shouldn't be running into this problem. But then again, with the real estate market so iffy, maybe this bank is just being ulta-conservative.
Like I said in my original topic, I DON'T NEED ANY MONEY, but with looking at property to buy in the next year or two, I wanted to beef up my credit profile and having a HELOC definitely does this.
As to the job thing, I haven't had a need to work outside of here since the divorce was final, given relatively low overhead and when I do (I have a part time, seasonal job) I have to watch what I earn so I don't end up kicking myself into the next tax bracket.
I'll figure it out. Thanks for your post.
I think the simplest way to show you are using credit is get a short term note to buy something, anything (diamond ring, vacation, whatever you want). Pay the thing off. Then they will see you are a good credit risk.
I know this is frustrating. I'm really angry with the banking industry that asked the TAXPAYERS to help bail them out, and then the banks turn around and make all these new rules that prevent folks from getting loans. I went to my bank this past summer to talk about a mortgage loan. I said, "How much down payment?" They said, "20%." I said, "No, that's for Joe Average on the street. I've been a loyal customer for 15 years, paid off mortgages, loans, cars, etc. I pay 10%." They said, "No, everyone pays 20%." I told them they will lose me for this loan and lose all that interest money if they do not meet my terms. We shall see what happens.
I like your idea of trying a different bank. See what happens.
Lynne
I ALREADY HAVE MY OWN CREDIT CARD which I always pay in full each month.
Hurtinandhealing: LOVE your suggestion of buying myself a diamond ring. Unfortunately, I had to tell Tom NO MORE DIAMOND JEWELRY as I have as much as I can afford to insure already! LOL!
I may take lycesq's advice and open up another charge account; maybe just use if for horse-related stuff and pay it off each month, as well. Who knows? Just about the time I do all that, something will change again. Whatever! Thanks, everyone!