I’m 19 and I’ve totally messed my credit up! Can someone lead me to the right direction to fix it PLEASE!

Question

I’m 19 and I’ve totally messed my credit up when I had no job. I had two credit cards that I totally maxed out and it stopped me from getting another. I’m trying to get a car in the next 6 months and I don’t know how to build my credit back up. I tried to apply for a credit card through CreditOne and they denied me. I also tried to open acct through a credit union and they told me no too! Can someone please help me to find a better way??

Answer 1

First of all do not apply for anymore credit right now.

What you need to do is get copies of your credit reports from the 3 bureaus Equifax, Experian and Transunion.

Take a photocopy and put the original in a binder.

Use a highlighter to highlight all the accounts that are old (> 7 yrs to be deleted, not yours or incorrect). You'll need to download disputer forms from the credit bureau websites and note what is wrong with the highlighted accounts.

If a debt is not yours then you dispute that too. If you don't know if a debt is yours or still payable ask for a debt validation from the credit bureau NOT the creditor.

If you want to pay off collections, contact the creditor/collection agency and negotiate a "pay for delete" along with payment (in full or payment plan)...make sure to get it in writing.

Get a secured credit card w/Capital One for say $500 or more if you can afford it. Do not max it out...use it sparingly for no more than $50-100 for the next 6 months. Pay in FULL and pay on TIME. By then you will establish a positive re-payment history. Ideally you need 1-2 years to rectify the worst part of your credit (non payment). But this will help. Do not apply for anything else until your score picks up.

Answer 2

1 Take a pair of scissors and cut your credit cards up into as many pieces as possible.

2 Use the calculator at http://www.bankrate.com/brm/calc/creditc... to figure out what you need to pay monthly to eliminate your debt. Pick some reasonable amount that you know you can pay monthly until the debt is eliminated. If your interest rate is quite high, try and find a credit card with lower interest rates (even if only for 1-2 years) and transfer the debt from your current card to the new card.

3 How much do you make at your current job? Can you find a better job that pays a little more? A couple bucks more an hour will go a long way in eliminate debt.

4 Reduce spending. Avoid impulse buying. Stop all fast food, drinks, etc. (those small costs add up to more than you think). If you are paying for Internet service, satellite or cable TV, etc. then cancel it. Be conservative on what you spend and don't buy ANYTHING that you can't pay off at the end of the month.

If you're in need of entertainment, use the library. Most libraries have free Internet terminals and WiFi access, plenty of music on CD, a lot of movies, and of course books.

If something catches your eye and you want to buy it, wait at least a couple weeks. Think of what it will cost, how often you will use it, and if it is necessary in comparison to other things you want to buy.

5 Is there a parent or anyone you could ask for a loan to pay off your debt? Most of what you pay on your credit card is probably interest. If you could pay it all off, you will save A LOT of money (the Bank Rate calculator above will demonstrate this).

6 Do you own any items of reasonable value that you could sell because you don't use them often?

7 Ensure you are working at least 40 hours per week. I don't know what your current job outlook is, but if you are working part time then try to get a second job, even just until any outstanding debt is paid off.

8 Try not to buy a car on credit, unless you can get interest free financing and you can pay it off in that period. Try to save up cash to buy the car with. Maybe even open a savings account.

9 Formulate a financial plan. Write out your monthly income, and break down expenses in order of necessity (starting with rent/mortgage).

10 Although it's far in the future, it is VITAL to start forming a retirement plan. When considering inflation, it is astounding at how much money you need to save in order to retire. You need to start moving money into mutual funds and other programs (10 percent interest/year average is a decent expectation) as soon as possible. Call up some financial institutions and see if you can have someone walk you through your options. You will be amazed to see that the first few years you save money plus the interest on that money will equal the majority of your savings later in life.

11 I don't know what your current educational status is, but you definitely want to look at college or obtaining a GED if you haven't finished high school. Junior colleges are also a good idea if you would prefer to transfer to a university after two years. Contact your local college's financial aid department and see what your options are. With a bachelor's degree, you will easily double or triple your income right out of college.

Realize you only have one life and one chance to get things right. I'm sure you've probably heard this 100 times, but really take a minute to think it over. I'm not saying money and finances are the important things in life, but they sure make it easier. If you want to be financially secure, consider the above ideas. It will save you from living from paycheck to paycheck, even if it may require a few sacrifices.

When you do decide to get a credit card again, only use it for necessary purchases which will prevent you from going overboard.  Only use it for gas and maybe monthly utility bills; this way you will build credit as these charges will be integrated into your financial plan.

Answer 3

pay off the credit cards - that's the only thing that will fix your credit - get 2 or three jobs if you have to  

Answer 4

Oh gosh, I did the same thing when I was your age. Unfortunately, credit is something that can take years to correct. I suggest cutting up any credit cards you have....get rid of them now. Start paying on the ones you owe and pay regularly. Never pay the minimun! If your minimun payment is $40...pay $50. $40 would just be paying interest and you'll never get done. I hate to say this but chances are you may not get approved to purchase a car without a co-signer. It's very frustrating but just keep paying your balance and work on it slowly. Make sure you keep up on any other bills like cell phone bills and stuff. If you mess up on those, it will also go on your credit. But one thing is for sure, this is a learning experience and trust me you'll never go through this again...cuz it's a pain.

Answer 5

Go to www.AnnualCreditReport.com and get copies of your credit histories from each of the three bureaus. This is a free service and will help you see how much you owe and to whom.

From there, you work out a plan to pay off those debts as quickly as possible. Here’s a calculator to help you figure out how long it will take to pay off your debts: http://bankrate.com/brm/calc/creditcardp...  Getting those debts off your credit report will help your scores.

There are car places that claim they’ll finance anyone. They usually charge insanely high interest rates though. If you can swing the payments, it might be a way to help you rebuild your credit.

Answer 6

You could try to get a loan through Prosper peer-to-peer lending. It will be expensive with your history, but if you do and you make all your payments on time, it will surely help with getting credit the next time.  

Answer 7

Here is a step by step guide to help you fix your credit.

http://www.badcreditfixup.com/how-to-rep...

Answer 8

Try getting a secured card and pay it off every month.  Also try getting credit at various stores and make payments on those.  That may build your credit a bit too.  Also get a utility in your name so that will go towards it.  And start making small amounts of payments on the cards you defaulted on.  Once they see you are trying they will report that you are indeed paying on them.

Answer 9

Get a job and start paying your bills.  When you pay off the two credit cards you maxed up you will have more credit available.  

Answer 10

free credit report.com

you should have seen this comin at you like an atom bomb

Answer 11

1) Pay off all the outstanding balances on your credit cards.

2) Check your credit reference on somewhere like http://www.experian.co.uk

3) make sure you are on the electoral role at your present address.

4) if anything bad comes out on your credit reference report get it resolved. i.e. CCJ

5) don't apply for more credit until you need it because the number of appplications is part of the information that is used for credit check.

6) make friends with your local bank branch and ask them for advice (make sure any over-draft is paid off first).

Answer 12

If you haven't paid off your two credit cards already, do that first. It's not likely that you'll be able to buy a car until you've done that. Then your credit will reflect that you pay your debts, and it should improve then, but keep in mind that it takes some time for the information to reach your credit report. So it won't improve right away.