What is the best way for me to get back on my feet from credit problems?
Question by Claypool: What is the best way for me to get back on my feet from credit problems?
I am 27 years old and I have not been to finacially responible with how I handled my finances in the past. The other day I tried to apply for a 0 loan and I go turned down flat. That particular incident made me realise that it is time for me to grow up now in the financial world at least. I have about 00.00 that I owe to various collection agencies. I will be getting a family of my own one day and I would hate to be rejected from getting the home do to my financial irresponsibilities of my youth. Please help! What things can I do to turn my credit score around and gain finacial control? Thank you.
Best answer:
Answer by sassybree1979
1 – pay EVERYTHING on time. Incur NO late fees.
2 – work on becoming debt free. Take the bill with the lowest balance and work on paying extra on it until it’s gone. Then take that payment amount and add it to the payment amount of the next bill. It rolls over and up. Make sense?
3 – do not live on credit cards. Begin an emergency savings account to handle lost wages, vehicle repairs, etc.
Unfortunately it takes a while to repair your credit. Each time you apply for credit of any kind, they look at your credit. Each time your credit is looked at it lowers your scores. Be patient, and diligent.
Hope that helps.
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First of all, kudos to you for taking an honest look at yourself and your financial habits. I am the same way, but it took years of my poor husband suffering through my irresponsibility and fighting me tooth and nail to make me realize his was the best and only way to live. There is no quick fix. Make all payments on time, and take 1 debt at a time and pay it off. It only takes a year of on time payments to see your credit improve to a respectable level, and within like 2 years of making on time payments and keeping our debts within our means our credit score was referred to as “freakishly high” when we purchased a new vehicle. I was very proud. I’m no longer afraid of an unexpected expense, because I know we now how have some $$$ in the bank & are able to obtain credit easily, should we need it. It is a very good feeling to be responsible and I hope you know the feeling by the time you’re 30. I learned that if you don’t learn to live within your means, then no amount of money will ever be enough. Good luck, and don’t get discouraged. It seems like a slow process but keep focused and time will go by quickly.
You are starting younger than I did. Your debt amount is low and once it is paid off start rebuilding your credit with a low limit credit card…that will keep you out of trouble. I have learned how to repair my credit in this web site…it really helped me.
http://www.mycreditadvise.com
The great thing is that you recognized the problem and are actively hunting for ways to fix it…
Good Job!
Consider working with a credit counseling service. The good ones are non-profit and don’t charge you any fees. They will negotiate with your creditors on your behalf and develop a plan that will put you on the road to recovery.
The service I recommend is here – http://necessaryvirtues.com/go/4018/15
The first and obvious step should be to stop incurring MORE bad credit by doing what others have already stated here: pay all current bills on time.
The second step, which requires MUCH more work on your part, is to check your credit reports (all of them) and make sure you dispute anything with incorrect information on them. Make sure that if the last time you paid on a credit card was in 96, yet they show you ‘180 days late as of 99′ that you dispute that as innacurate data.
Things that are VERY old should be disputed period just because the original people probably can’t even prove you owed the debt at all or wont respond in time for it to not be removed.
After you’ve disputed and resolved any issues, the next step is to start making deals with collection agencies. Use your credit as a tool to barter by agreeing to pay ‘X’ amount if they COMPLETELY remove their entry on your reports. GET IT IN WRITING that they will do this. Don’t let them tell you they will report it as satisfied, tell them if they want ANY money, that they will remove the record completely as if it never existed.
Careful with this, as they will try to word it to where it will just be updated and not removed, and if they do this and you agree, you are SOL.