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Started By
Message
I've fallen on hard times, credit score has plummeted
Posted on 7/8/14 at 9:19 am
Posted on 7/8/14 at 9:19 am
Long story short in the last 4 months I've had a lot of hard issues come up..truck broke down, hospital bills etc and I've got 3 credit cards limited out at around $3,200 along with 35k of school debt. Score went from 680 to 580 within a matter of months...and I need to get a new car to boot and won't have the credit score to get approved for one..how do I go about fixing up my credit score? Some steps I can take? Not saying it will be a short process but I do not have a lot of credit history either so maybe it isn't the end of the world, but definitely a wake up call as I am young..
Thanks for any responses
Thanks for any responses
11
Posted on 7/8/14 at 9:26 am to The Calvin
Put together a budget. Work a second job. Sell crap you don't really need/use. Don't buy a new car.
Posted on 7/8/14 at 9:28 am to The Calvin
I would be doing everything in my power to get those CCs paid off.
Posted on 7/8/14 at 10:13 am to The Calvin
Keep your head up and stay positive. Set a budget and stick to it while knocking down the cards with the highest interest rate first.
Good luck
Good luck
This post was edited on 7/8/14 at 10:13 am
Posted on 7/8/14 at 10:14 am to The Calvin
Don't be late/miss a payment.
Work with your creditors to get a payment plan or other ways to work out the debt. School loans are usually very flexible with this. Medical bills can often also be worked out on a payment plan.
What has actually made the score tank? Did you miss a payment or some other blemish? Or just utilization ratio?
Work with your creditors to get a payment plan or other ways to work out the debt. School loans are usually very flexible with this. Medical bills can often also be worked out on a payment plan.
What has actually made the score tank? Did you miss a payment or some other blemish? Or just utilization ratio?
Posted on 7/8/14 at 10:33 am to The Calvin
Best Money You Will Ever Spend
A good credit score is the result of good money decisions, not a goal in and of itself. Handle your affairs correctly now, and in 10, 15, 20 years, you won't need a good credit score because you won't need to borrow money.
quote:
how do I go about fixing up my credit score?
A good credit score is the result of good money decisions, not a goal in and of itself. Handle your affairs correctly now, and in 10, 15, 20 years, you won't need a good credit score because you won't need to borrow money.
This post was edited on 7/8/14 at 10:35 am
Posted on 7/8/14 at 10:34 am to The Calvin
First thing I would do if you haven't already is get the student loans in financial hardship forebarence. They will still accumulate interest, but you don't have to make a payment, and it's not reflected on your credit report. If you desperately need a new car, and don't have the means to pay cash, perhaps swallowing some pride and asking a parent to co-sign? I had to do that when I was in a similar situation several years ago. It sucked, but my dad was more receptive than I thought he'd be. And if you do, don't go big. Find an Accord or Camry or something in the $6000-$8000 range. Then if the minimums on the credit cards are too high, call them up and see if they would accept less without any penalties, and work your arse off to get them paid off ASAP. Same with the medical bills. Coincidentally it was medical bills that killed mine when I broke my ankle without insurance. Thankfully I didn't need surgery, or I'd probably still be paying it off 13 years later.
The only thing that's going to improve your score is time and making timely payments on your debts during that time. It took me over a year to get mine up from 550 to upper 600's and I never missed a payment in that timeframe. It really sucks how quickly and how far it can drop compared to how long it takes to rebuild it. Good luck.
The only thing that's going to improve your score is time and making timely payments on your debts during that time. It took me over a year to get mine up from 550 to upper 600's and I never missed a payment in that timeframe. It really sucks how quickly and how far it can drop compared to how long it takes to rebuild it. Good luck.
Posted on 7/8/14 at 10:38 am to LSUtigerME
Late on a payment and credit utilization at 82%
Think I can pay all my credit cards off by next month..will this help my score come up a bit?
Think I can pay all my credit cards off by next month..will this help my score come up a bit?
Posted on 7/8/14 at 10:44 am to The Calvin
quote:
Think I can pay all my credit cards off by next month
Leave a 100-200 balance on your cards to keep building your score for the future.
Posted on 7/8/14 at 10:46 am to The Calvin
quote:
Think I can pay all my credit cards off by next month..will this help my score come up a bit?
A little - but be careful how and when you start to cancel accounts (if you choose to go that route) - you definitely want to close from newest to oldest, and you don't want a closure to trigger an increased utilization.
The only thing that will cure the late payment issues is time. Keep a mix of accounts, if possible, and try to avoid a whole slew of new credit requests.
Honestly, I would self-finance for a while - don't borrow money for a new car - if you have to borrow at all, go mid-high 4 figures and pay it off with the quickness.
Seriously, get the Total Money Makeover, do your budget, cut to the bone, and work the debt snowball. You'll be debt free before you know it.
Posted on 7/8/14 at 10:54 am to Coach Guidry
quote:
eave a 100-200 balance on your cards to keep building your score for the future
You don't need to do this at all. Just get your utilization down below 20% for credit score purposes. If you can pay them all off and continue to pay them off every month, then that's absolutely what you should do.
Posted on 7/8/14 at 11:27 am to Coach Guidry
quote:
Leave a 100-200 balance on your cards to keep building your score for the future.
That will do nothing to his score. Getting his utilization rate to under 10% will be the kicker.
Posted on 7/8/14 at 11:35 am to Golfer
Is it more beneficial long term to pay off the credit cards, or keep a balance on them and make timely payments on them over time? Honestly don't know, but would lean towards the latter being the better option for someone with little credit history.
Posted on 7/8/14 at 11:44 am to The Spleen
Pay them off. Then use them as needed and pay them off monthly. There will almost always be a balance showing in regards to credit reporting so unless you run them up near the limit and pay them off each month there is no adverse affect.
Posted on 7/8/14 at 11:58 am to The Spleen
The balance that would show on a credit report is the previous statement balance.
If you want to build credit, make sure your statement balances are less than 20% of your combined available credit. If you pay off purchases on your CC before your statement date, then they wont hit your statement balance. This could help you or hurt you.
For example:
If I have a card with a 10k limit, I don't want my statements to total more than 2k. If I buy flights to Europe for my family on my CC and they cost $2500, I may want to pay off at least $500 of that before the statement date so that my utilization is under 20% when the statement hits.
However, if that is the only purchase I made the whole month, I probably don't want to pay off the whole $2500. If I pay off the whole $2500 before the statement, then the statement balance will be $0. This isn't necessarily a "bad" thing but it doesn't help me because it doesn't give me a payment history. I don't owe anything so I'm not making a payment so I'm not increasing/improving my history.
If you want to build credit, make sure your statement balances are less than 20% of your combined available credit. If you pay off purchases on your CC before your statement date, then they wont hit your statement balance. This could help you or hurt you.
For example:
If I have a card with a 10k limit, I don't want my statements to total more than 2k. If I buy flights to Europe for my family on my CC and they cost $2500, I may want to pay off at least $500 of that before the statement date so that my utilization is under 20% when the statement hits.
However, if that is the only purchase I made the whole month, I probably don't want to pay off the whole $2500. If I pay off the whole $2500 before the statement, then the statement balance will be $0. This isn't necessarily a "bad" thing but it doesn't help me because it doesn't give me a payment history. I don't owe anything so I'm not making a payment so I'm not increasing/improving my history.
Posted on 7/8/14 at 12:03 pm to The Calvin
Priortize. If it was me, issue number 1 would be the vehicle, if you need it for work / to get to and from work.
If you can raise $3,200 in a month, go buy a $2,000 car or @2,000 repairs in your truck if your truck can be repaired for that.
Ask a family member if they can help you with the vehicle situation.
Call the three credit card companies and ask them if you can do a temporary rate reduction. If you are late as of now on the cards, explain why you are late and that you are trying to catch up. Most companies will work with you.
Call the student loan lender and ask for a temporary forbearance, again, due to the issues you've had.
Call the medical providers and explain the situation, and tell them you want to send them something today. Most of them will hem and haw, but as long sa you are sending them a few bucks a month and are talking to them monthly, they won't send to collections.
Credit score is the symptom, not the problem. The problem is your recent inability to pay bills as they come due. Deal with that. The late payment issue won't hurt as bad over time.
If you can raise $3,200 in a month, go buy a $2,000 car or @2,000 repairs in your truck if your truck can be repaired for that.
Ask a family member if they can help you with the vehicle situation.
Call the three credit card companies and ask them if you can do a temporary rate reduction. If you are late as of now on the cards, explain why you are late and that you are trying to catch up. Most companies will work with you.
Call the student loan lender and ask for a temporary forbearance, again, due to the issues you've had.
Call the medical providers and explain the situation, and tell them you want to send them something today. Most of them will hem and haw, but as long sa you are sending them a few bucks a month and are talking to them monthly, they won't send to collections.
Credit score is the symptom, not the problem. The problem is your recent inability to pay bills as they come due. Deal with that. The late payment issue won't hurt as bad over time.
Posted on 7/8/14 at 12:06 pm to LSUFanHouston
quote:
Call the medical providers and explain the situation, and tell them you want to send them something today. Most of them will hem and haw, but as long sa you are sending them a few bucks a month and are talking to them monthly, they won't send to collections.
This, this, this.
If you talk to the doctors and hospitals they will work with you. If you ignore them they will send you to collections quickly. I've helped my daughter with this situation and there was no adverse affect on her credit report.
Posted on 7/8/14 at 2:02 pm to Ace Midnight
quote:
Seriously, get the Total Money Makeover, do your budget, cut to the bone, and work the debt snowball. You'll be debt free before you know it.
This. It works. You have to be willing to work and sacrifice, though.
Posted on 7/8/14 at 2:31 pm to The Calvin
Calvin are you local to BR?
Posted on 7/8/14 at 2:58 pm to The Calvin
quote:
ong story short in the last 4 months I've had a lot of hard issues come up..truck broke down, hospital bills etc and I've got 3 credit cards limited out at around $3,200 along with 35k of school debt. Score went from 680 to 580 within a matter of months...and I need to get a new car to boot and won't have the credit score to get approved for one..how do I go about fixing up my credit score? Some steps I can take? Not saying it will be a short process but I do not have a lot of credit history either so maybe it isn't the end of the world, but definitely a wake up call as I am young..
Buy Dave ramseys book or listen to his show online.
You DO NOT need a new car. Buy a $1000 beater vehicle and get ur self out of debt. Work 2 jobs and pay the snallest CC off first.
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