How to fix a really bad credit? what are the fastest and easiest steps to take?
My credit score is probably around 400. The reasons are credit cards and a school loan of 38,000 that I have not been paying. I really want to start fixing this. I can’t even get an old navy card with my credit score. I really need some help here.
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There are no quick fixes. Start paying your bills on time. Your credit score will improve in about 2 years.
So, start paying off the student loan!
you can start by paying your bills, this is the only way to improve bad credit. you can talk to a credit counselor but they can only give you advice, you have to do the work and follow that advice
Easiest ways to get better credit:
1) Get a secured card. There is very little risk to getting this kind of card. It is like a savings account. You are basically using your own money as credit instead of theirs.
2) “Piggyback”. Does anyone in your family have good credit and use their cards regularly? Ask them if you can be a joint card-holder on their account. Tell them they can keep your card, because you don’t want it, you just want better credit. They will keep on spending and paying on time like usual (since they have good credit, remember?) and your credit will go up. This is legal, and you can do this with anyone YOU TRUST to not mess up their own credit.
you have to apply yourself to paying off your debt. even if you have to get a second job (if possible). i paid down a credit card debt and every extra cent i had went to paying it off (including tax returns).
Everybody’s posted some pretty decent answers, Ace got it ½way right. You can’t piggyback as an authorized user anymore after September. But before I continue, it helps to know what you’re dealing with:
1. Payment history- 35%
2. Total debt owed vs. available credit – 30%
3. Length of time establishing credit 15%
4. Types of credit established 10%
5. Inquiries and New Accounts 10%
Having said all that, #1 & #2 are the 2 most important factors when it comes to computing your score. Payment history and the total amount of debt you have versus the ability to borrow.
First you need to equip yourself with some basic tools. Do you have a checking and savings account? Is it in good standing? If both the answers are “yes”, read on to the next paragraph, if not then listen carefully. It’s important to open a checking account pr some type of bank account that offers bill pay in order to give yourself some kind of reference when, how, and where your money is going. A checking account is the best tool you can have in order to build and keep good credit. LIke I mentioned earlier with the billpay it serves as a means for you to pay on time, which is the most important aspect of your credit.
Once you have a bank account ready, then list the debts, mainly the credit cards in order from oldest to most recent debt. The statute of limitations for collecting the debt in court may have already expired for one, some, or even all of the debts. If this is the case, you could use this as leverage against the collection agencies when negotiating a payment for deletion which is a payment in return for completely removing it from the report altogether. Here’s a link that explains it more in detail on what exactly you need to do and go about trying to settle the credit card debt.
http://www. creditinfocenter. com/debt/settle_debts. shtml
As for the student loans, you have a couple more options that you may want to try.
If you’re able to, go back to school. That’s one way to get your student loans out of default status. If that’s not an option, ask for forbearance, which will allow you to catch up on the loan to get it back in good standing. Here’s an article that explains more in-depth about your options.
http://www. bankrate. com/brm/news/advice/20030318a1. asp
Hopefully, if you’re able to get those old credit cards paid off and taken off your report and you student loan in forebearance, then what you’ll need are some positve trade lines building credit for you. Now applying for a low limit unsecured card will help, but chances are that’s not likely to happen because of your score, so the best option in this case would be to open a secured credit card. Now I mentioned earlier that you should open a checking account at a bank, here’s an example of how this will come into play. A lot of banks including some major banks which I’ll post the links to below offer secured credit cards. You can think of this as a credit card with training wheels or building credit with a savings account. The good news about these cards is that they’re a lot easier to get approved for, the bad news is that you have to put a deposit upfront that’s used as collateral for a credit limit. But actually this works in your favor because you can control the credit line by adding to the deposit instead of having to be at the mercy of the credit card company when you request for a line increase. The deposit gains interest while you build credit which you can get back usually after paying on time and managing the balance at or below 25% of your available credit for 9-18 months. It also helps your credit if you raise your limit as high as you can by adding to the deposit so it shows that have the ability to borrow, but don’t use it. Once you qualify for a regular card, you get the deposit back, so think of this more like an investment instead of an expense. You’re making an investment to rebuild your credit with a secured credit card because it’s up to you and how well you pay whether or not your get your deposit back.
It’s going to take some money, and most of all time to heal the damage that’s done. I gave you some basic tips that should help you out.
Good Luck!
First, make sure all the information on your credit report is accurate.
Second, try to pay off all or any accounts that are currently in collections or make payment arrangements with the creditor to pay off the balance monthly.
Third, any credit card that is over 50% of the available credit line should be paid down to under half of your total credit line. Your credit score is lowered when your available balance is over 50% of your total credit line.
Finally, if you have bad or no credit and have no credit cards try to obtain two credit cards and make sure all of your monthly payments are made on time. This will help increase your credit score. If you cannot be approved for a unsecured credit card, obtain a secured credit card.
Repairing your credit and improving your credit score is a slow process that takes time.