I have horrible credit how do i fix it??

Question

I'm only 21 and screwed up my credit so bad. When I was 18 I moved to manhattan and maxed out my cards and was late paying them off. They're all payed off now and closed accounts. How do I build up credit again if I can't get another card to make my credit better? I'm so confused and frustrated because I know when it comes time for me and my boyfriend to get our apt. they will most likely run a credit check on both of us and my credit is horrible. What can I do? I need advice badly.

Answer 1

Good on 'ya for trying to fix it...here's a few tips to get the ball rolling....just be patient and diligent...it will get better.

1. Order your credit reports from the 3 bureaus

www.equifax.com

www.experian.com

www.transunion.com

If you're ordering for the first time, get your score (for a fee) from Equifax as their scoring matters most.

2. Make copies of your report and put the originals in a binder. On the photocopied reports use a highlighter and check for any incorrect, outdate, false, etc...info

3. Download a dispute letter(s) from the credit bureaus website and list anything that is wrong. Mail them to their office(s). They have 30 days to reply.

4. If they will not remove something that is not yours or too old (> 7 years) as them for a debt validation. This may take an additional 30 days.

5. Once the 'baddies' come off, take care not to let any of your other accounts fall into that predicament.

6. If you haven't already make sure your existing accounts are current and paid on time ALWAYS.

7. Get a secured credit card with www.capitalone.com or www.mastercard.com for like $500-1000 or more if you can and use it sparingly. Charge like $50 on the card each month and pay it in FULL and on TIME. Make sure you do this for a minimum of 6 months so that you estabish a positive repayment history.

8. Problem with just letting them (collections) 'fall off' is that they may never. You may get sued before that...that's where you suddenly get a summons to appear in court and a judgment for collection against you.

For collection items...pay them but get a 'pay for delete' from the collection agency in WRITING...they'll delete it after you pay and it will help your credit score.

Answer 2

Really nothing. You need to pay all of your bills on time EVERY month and thats about it and it could take up to three years for your score to go up, credit is soooo important and really hard to fix once you mess up! There is NO magical way to make it better.

Answer 3

You can consider getting a prepaid credit card.  The advantage is that it will allow you to make purchases over the internet, phone, etc.  But more importantly, it will help you rebuild your credit.

Other than that, paying your bills on time, making more than the minimum payment and time are all that can really help your rebuild your credit.  Unfortunately, it can be a slow process.

Do you know how bad your credit score really is?  Maybe it isn't as bad as you think.  After all, you did pay the cards off - which is better than filing bankruptcy or not paying them in terms of credit history.  Maybe you should check your credit report/score and see where you stand.

Answer 4

If you need guaranteed approval for a credit card I'd go to this site:

http://applyforcreditnow.ecreditdirector...

& if you need some credit repair and counseling i'd call these people:

CCRS credit services 1.866.952.6015 and see what they suggest.

Answer 5

When the time comes when you have money saved for a downpayment (at the very least 10%) ask if they do manual underwriting, there are lenders who still do this and there shouldn't be a fee for it either. If you are in good standing with your apt manager (having paid your rent on time), you have a job, you can qualify for a mortgage with just as good of an interest rate as with a credit score.

Answer 6

To raise your credit score you need to do two things:

1 - add positive things to your credit records.  Such as paying your bills on time!

2 - Remove negative things from your records.  These may be mistakes made by the credit report companies or bills you haven’t paid!

If your problems aren’t too bad or too complicated than you can do this yourself.  This review site gives you e-books to explain the process and guide you through it:

<>http://www.onlinebestinformation.com/cre...

if your problem is complex - or you just don’t have the time or patience to do it yourself then you will want to use a credit repair company.  This review site will guide you to the three best companies to use:

<>http://www.onlinebestinformation.com/cre...

Good Luck!

Answer 7

Well, I'm glad that you were able to learn your lesson, and "stop the bleeding", per se when it comes to your credit. Based on your question, the good news is that the accounts are paid off and closed, the bad news is that the same accounts that you paid off are closed, and you're having trouble trying to establish credit.

Brandy has a very good idea, but myself being a credit analyst and underwriter at a credit card company, I could give you some insight on how you can find yourself a respectable credit card to get you building credit again.

The easiest credit card to get, hands down would be a secured credit card. You're assuming 100% of the risk becuase you're using your own money as collateral to establish a matching credit line. For example a $300 deposit would get a $300 limit, and a $1000 deposit would get a $1000 limit, and so on. A secured card has advantages over a "subprime" unsecured card in that an a subprime unsecured card will generally have a lower credit line in which you're at the mercy of the credit card company in order to increase the limit. Also depending on the company, fees can be charged to the card before the card's even used, and it can take 6 months to a year before unsecured cards can actually make a difference on your credit, as opposed to secured cards benefitting your credit after a couple of months. Also, with a secured card, you have the benefit of increasing the credit line by simply adding to the deposit, and as long as you keep the account in good standing, the deposit is refunded some time later and a regular card is issued out. Major banks like Bank of America, Wells Fargo, WaMu, USBank, and Orchard Bank (HSBC) offer these cards. It would help to open no more than 2 of these if you can.

I posted links to several secured card companies that I mentioned

I hope this helps, thanks for reading and good luck!

Answer 8

This worked for me. Get a TRUE copy of your credit report. Not some report from like Truecredit. , these cheesy reports dont even have the full account numbers you'll need in case you have to dispute it. I used creditrescuenow.com. HIs name is Michael Ramos. I looked around for a while and he was one of the only credit restoration companies I found spoken of highly at the Better Business Bureau. I'm local (in NM) so I went to his office and spoke with him. This is what he did. He disputed some things on my credit report that were wrong and right.  For instance, I had some major probloems with late payments and two cards that went into collections. Once you pay anything you owe the collection agency or card agency must remove the items from your credit its the law! They will tell you it stays on your credit for 5-7 years but this is wrong! As soon as the debt is either dismissed or disputed or paid in full it must be removed. Send a certified letter asking them to remove the account in 30 days or suffer legal action and you'd be surprised how fast they react. Now, to actually build your credit try this - listen carefully. This will take $1000 to do, but you will get it back! Take  a $1000 and go to a local credit union and get a secured $1000 loan. Tell them you are trying to establish credit and they will completey understand. Now take the $1000 cashiers check they give you and go to another credit or bank and take another $1000 secured loan out using the $1000 from the first credit union. Now take the $1000 they give you and get a secured credit card at a bank. The $1000 will be tied up for at least 5-6 months until your credit card becomes unsecured. Once the credit card becomes unsecured remove the $1000 from the secured credit card and pay off your first loan. Then take the secured money you had from the first loan and pay off the second loan. Now take the $1000 from the second and put it back into your savings or checking account. Drag this out over a 8-10 month period. DO NOT PAY OFF THE LOANS RIGHT AWAY. Creditors want to see consistent payments for 6 months or longer. You now have built your credit not lost any money (except small bank fees like $20.00) and you also have a unsecured $1000 credit card that will continue to build your credit if paid on time. Also on the credit card make sure to leave a small balance like $40-$50 all the time. This gives the bank time to report a balance on your credit, this is very important. You must show a balance on your credit on the credit card to improve your score. If you pay off the card totally every month the bank never has time to report a balance in good standing. Hope this helps!

This will give you two installment loans and one revolving credit card on your credit. This is three seperate pieces of credit and if paid on time will work awesome! I know from personal experiance. Also if $1000 is to hefty a number for you do it with $500. You will not lose any money except the bank fees. All you are doing is transferring the same $500 or $1000 between three seperate banks or credit unions. And in the end it comes right back to you.

Answer 9

Raising your credit score takes time. You need to stop spending immediately. Cut up the credit cards. Call your credit card company and explain your situation and your desire to pay off your debt as soon as you can and that you are willing to cooperate; they may be able to negotiate a payment plan with you.

Answer 10

If all of your debt is paid off, thats a great start. From there, it just takes the form of a waiting game, really. It will take between 6 and 12 months after paying the debt off to begin to see any improvement in your score.

Sometimes banks will do a type of "Loan" program where you purchase a CD with a loan from them, and make small monthly payments for the duration of the CD (usually 1-5 years, depending on the amount and CD), and then you get the money from the CD and the interest that has built up on it when it is paid off, so you really dont lose anything, because the interest gain on the CD is usually as much as or more than the interest paid on the loan, and it helps your credit a lot if you make those payments on time.

If getting an apartment might present a problem, maybe there is a way to report your income to the household, but leave you off of the lease as a responsible party. Some applications are built like that, others are not. It all depends on the apartment complex and other stuff.

Best of luck! :-)