Army Soldier Wants to Fix His Credit After a Messy Divorce

“Dear Steve,

26yr old Army soldier trying to fix credit after a messy divorce a few years back. I was deployed, she decided to leave, and stopped paying on just about everything that was in my name without my knowledge.

Upon my return, I joined “” to continuously monitor my credit and my debts, and I contacted and paid and/or settled many of my delinquent accounts.

My credit score has gone up slowly, but it has now peaked at 605. I still have two major collection/charge off accounts on my credit (totaling $12,000 between the car she had repossessed and a bank of america credit that my parents put on me then didn’t help pay), then my college loans that are in good standing with less than $2,000 owed, and as of last year a “retail” credit card through the military that is in good standing with only $100 of the available $1,200 limit being used.

My question is, how can I go about getting my credit better?

I still can not get even a small auto loan ($5,000) to even jump start the credit help.

The Bank of America card is about 5yrs ago, and the car repo was from 2009. Should I try and settle those accounts, or let them “fall off” after 7years?

What are the benefits to each?

I plan to pay the rest of my college loans in one sum of money with myself being deployed again, as well as the Military Star card that I have.

Eliminating those leaves me with only the car and the credit card debt as any money that I owe.

So I’d like to know what I should do about those. I’ve read from you before that a secured credit card is also another good way to help rebuild credit. Is this something I should do as well, even if I was just denied a loan for $5,000 for a car?


Dear Hunter,

Thank you for reaching out and asking your question. And thank you for serving in the military.

So let’s tackle your situation.

I understand what happened and how you returned to the mess. It is sadly not uncommon in the world of people that come to me for help.

Meeting with Pusht-e Rod leadershipMonitoring your credit is a smart thing to do when you’ve had those kind of surprises. And it is especially helpful if you are stationed far from home. It let’s you keep your eye on your credit while you are off doing more important things.

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I’m not sure what the cost of the program you signed up with but there are some less expensive options if you want to save money on it. At this point monitoring all three bureaus might not be needed since the mess has been uncovered and identified. says their program costs $19.99 a month. However to monitor your credit score and watch for any drops or changes is something you can do for free. Credit Score monitoring and both offer free monitoring with a one bureau credit score.

Regarding the old accounts. I’m a big fan of finding a resolution to debt rather than just letting it linger unresolved. My feeling is it is better to close the door on the old debt and never have to worry about it again.

As long as a debt remains unresolved in some way you face potentially being sued as long as it it within the statute of limitations or facing collection on the account forever.

Most people are under the wrong impression that when a debt falls off your credit report or is outside the statute of limitation it is no longer collectible. That is not true. The collector or debt buyer can continue to try and collect but just can’t sue you over it.

When you are on active duty, the Servicemembers Civil Relief Act provides you with some protection from creditors.

The better way to jumpstart your credit and get your score moving up again is going to be with having several credit cards in your name which report to the major credit bureaus. The easiest way to do this is to get a secured credit card. With a secured card you put down a deposit and your credit limit is determined by the amount of the deposit.

But you need to make sure you increase your limits on these cards to $1,000 or more over time. The lower the credit limit, the less it helps boost your score.

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Student loans, car loans have much less power to boost your score. While your on-time payment history is positive they are not major credit cards which have more power to raise your score.

The issue you are facing is one I see often. Your credit history essentially ended on a dig downer and there has been little good stuff to pull it up.

While the collection accounts will impact you less and less as they get older, the fact remains you have little current good stuff being reported about you.

Think about it like a report card in school. If you want to bring up your D average you need to get some higher grades.

I can’t see how getting a car loan now would be helpful to accomplish your goal. You appear to be ready to be deployed again soon and I’d rather come up with a plan that can be executed long distance and give you the least worry and biggest benefit upon your return.

So to do that I think the first order of business is to address the two outstanding debt in some organized way. Since you are in the military I know of some groups that might assist you with that for a reduced cost.

Maybe you can let me know the balance of the individual accounts in collections, post them in the comments below, and we can see if settling those now makes sense.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
Damon Day - Pro Debt Coach

10 thoughts on “Army Soldier Wants to Fix His Credit After a Messy Divorce”

  1. I recently picked up a local department store card that said they report to the credit people. I go in and buy clothing for work and then pay it off. I did this because a friend of mine told me that this would help me establish a better credit rating but to make sure that they report good standing information to the credit people.

    @ Steve Rhode
    Does that seem like something that would help the average credit seeker? thank you

    • They might report but they count less in boasting your score. The general consensus is stores will pass out cards like water so they are not an indication of creditworthiness.

      Unfortunately your friend was mistaken. In fact applying for a number of store cards can lower your score from the frequent inquiries.

      • They did say to choose wisely and make sure that they do report good behavior to the credit bureau before you try to get the card. They did mention if I tried to often and was denied it would reflect negatively

        thanks Steve

  2. Thanks for such a quick reply! I understand about doing what is possible to alleviate the debt with a plan other than just letting it “fall off.”

    To help clarify, the car note is around $6,500, and the B of A is just over $7,000. I do believe that B of A tacked on fee’s and interest that shouldn’t have accumulated, but at this point I don’t know if that’s even relevant. I can also say that I’ve not been contacted by either establishment for some time now. I understand that contacting them will start that 7yr period over, but I’ve seen where you’ve mentioned that a paid debt is better then it just “falling off” if you’re looking to grow your credit. Also, what is the difference of settling in full vs. paying in full (besides the actual amount of money spent)? Could I settle with these companies for what’s usually a fraction of the cost, or does that not help as much as paying them in full?

    Also, I went ahead and paid off my other two college loans today. It cost me roughly $2,000, but I thought it was one less thing to worry with and pay on which would free more funds up later if I did indeed start settling the other accounts.

    One last thing as well, the secured credit cards you mentioned. What are some cards/companies that hit all three credit bureaus so I can look into them?

    Thanks again for the help!

    • Hunter,

      If you get a chance to leave me some feedback, look for the “Rate Our Site – Leave a Testimonial” button that is just above the related article section.

      To your questions. I agree having those student loans out of the way is a great emotional feeling. Congratulations on putting those behind you.

      It’s not contacting the creditors that starts the clock again it’s admitting to the debt and making a payment.

      Thanks for the additional information.

      The better approach here might be to focus on saving up as much money as you can and let’s wait and see if they contact you. If you can save up about 50% of the balance you’d be in a good spot to attempt to settle. For more on the pros and cons of settling see

      When you settle a debt it would appear on your credit report as part of it being paid and the other part forgiven as a bad debt. It would still fall off the consumer credit report about 7 years from the time it first went delinquent. The settlement would not change that.

      The bigger benefit with this old debt is just closing the door on it. Coming to a mutually agreeable settlement with the creditor does that.

      Capital One has a really good secured card. Bank of America does as well. Just do a search for “Secured Credit Card” and you will find a lot from recognizable banks.

      The key to the secured card is getting your limits up so they boost your score.

      • Steve, thank you again for such a great response. (I did rate the site just a moment ago as well).

        Thank you for the kind words on finishing the college loans. It’s one less thing I now have to worry about, and even though they were in good standing, I feel better about it.

        As far as the other debt is concerned, being that I am deployed again currently, I can save a decent amount of money to go towards settling. I have the direct contact information for both the vehicle and Bank of America [due to the credit report website I use (which I do have a discount for by being with them for a few years)]. So after another couple months of saving, I will contact them directly and try to settle. With that being said, should I just pay the lump sum or set up payments for an agreeable amount? Or does it even matter as long as it’s being settled? I am glad to hear that the account will still “fall off” my report in the same amount of time regardless if I settle or not, but knowing that it doesn’t have the chance to come back on me by settling is a comforting feeling.

        Thank you for the information in regards to the secured cards as well. I will go take a look at those too. It would probably be a good idea that I wait on those until I settle the other two aforementioned debts before doing this though, correct?

        • If they are not contacting you now I would just take the time to save up the money first before contacting them. No need to open that up without you being in the best position.

          Logically the installment payment is the fallback position for the creditor and they’d prefer a lump sum payment and be done with it.

          In this case you seem to have the opportunity and time to do that.

          There is actually no need to wait on the secured cards. The sooner you get going on that, the longer they will appear on your credit report and that’s a good thing.


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