paid off all my debt...now what?

[blessedwithboys]

bc of a large inheritance i received last yr, i was able to pay off all of my credit card debt and medical bills (at about 40c on the $!!!). i did not pay off my student loan, about 8k or so, bc it was in economic hardship deferment or forebearance or whatever. i figured i would start making payments when that ended, as i know i need to be making payments on things to build my credit back up.

i had an opportunity to buy a new car, but i went ahead and paid cash. i couldnt wait too much longer to get into a new ride, as my old one was on its last legs, so waiting for my credit to build back up in order to qualify for a loan would have been rough.

so, then...what do i do next to repair my credit?

[Rowansmama]

One of the best things you can do to rebuild credit is to make regular small charges on a credit card that you pay off on time every month. And definitely check your credit report closely to make sure there are no errors whatsoever. For example, make sure all accounts that were closed by you are actually listed as closed by you and not by the company. It does take time to repair credit, but not as long as a lot of people think. Good luck!

[wahlmn]

Instead of just repairing your credit, I would actually work on repairing your life! If you are out of debt, I would keep budgeting and ensure you are saving money for both those student loans and to fund an emergency fund. I don't follow Dave Ramsey per se, but I do think he has some good principles. Once you have some more money in the bank, your peace of mind will be immeasurable. Then you can open up the possibilities of saving for retirement, college, etc. Good luck!

[Cheshire]

I agree with pp - change your habits. The rest will fall into place as you learn how to live on what you have and avoid ever running up debt again.

Start paying your student loans now. That forbearance does not stop the interest from adding up. Get on a budget - know where every dollar goes so you'll have a handle on your money. Set up an emergency savings and once that is funded pay yourself first into a regular savings account.

Set goals. Set goals. Set goals. You won't get where you want if you don't have a plan.

Research shows that those who pay off debt with a windfall (or a home equity loan or whatever large chunk of cash comes their way) and don't work a plan to pay it off have a greater chance of going right back into debt because they haven't changed their money habits. This is your chance to change the rest of your life and if you have kids, their lives as well.

If you don't know how to start Dave Ramsey is a good place to get the basics. Or, find a mentor or hire a financial planner. We aren't born with the knowledge of how to handle money. It has to be learned and if you don't get it in school (most don't) or at home you have to learn it as an adult. You've already had the hard knocks lesson so now you've been given a great, fresh start.

Best wishes!