Have been sent to collections..22 years young

Discussion in 'Credit Talk' started by getsbetter, Dec 1, 2014.

  1. getsbetter

    getsbetter New Member

    Well, I am new here first of all, and very frustrated with myself. I stay awake all night, every night, worrying about my credit, feeling like it will never get better.
    I made some bad choices with credit cards, and medical bills that I could not afford to pay. I have been sent to collections many times, and am in my last payment plan to a collection conpany for my Chase Visa card. I am paying $50.00/wk and my last payment will be in March.

    Like I said, I am very upset with myself for being so young, and messing up my credit. I am in a spot where I am financially responsible to handle a credit card again, as I know I can pay it, and I think it would help my credit score. My credit score right now is 488.

    Any tips on what I should do now? It seems to be that maybe since I'm still paying my collection, I can't get any credit cards to help rebuild my credit?
    I have heard from some local banks about a loan, where I pay the bank x amount of money a month, and eventually when I have the "loan" paid off, he helps my credit score?

    My DH and I are planning on building a house this spring, and I wanted to get a Home Depot card to help with the financial aspect of our house building project, but Home Depot has denied me..
    Should I try to apply for a secured CC or a gas card even though I have a payment plan with a collection agency, or is getting approved for a CC impossible if I'm in collections?
     
  2. jam237

    jam237 Well-Known Member

    Ok, remember, slow and steady wins the race... Think like the tortoise and not the hare...

    Score-wise, repaying the collection doesn't offer too much of an improvement, but will help if you need a mortgage or other credit for the building of the house.

    Secured cards can help to give you credit building opportunities.

    Some banks (as you said) will offer credit building loans... You make a deposit of $x,xxx.xx into a savings account; they give you a loan of $x,xxx.xx. You make payments on the loan as if it wasn't secured.

    It's hard to say what you will or won't be able to be approved on, there are some banks which are more willing to help restart and build credit than others.
     
  3. credit guy

    credit guy Member

    don't pay it. Dispute it with the original creditor
     
  4. jam237

    jam237 Well-Known Member

    Disputing things with the original creditor doesn't stop the CRA from reporting what the CA is giving them.
     
  5. Carl_

    Carl_ New Member

    As others have said, restoring your good credit will take some time. The good news is that you've realized at a fairly young age how bad choices lead to bad credit scores, and how bad scores undermine your life. Many, maybe most, Americans don't learn this until they're much older. So stop beating yourself up for being young with bad credit. If you learn your lesson now and start rebuilding your credit, you have a long life ahead of you with excellent credit and the security it brings.

    To rebuild your credit, you essentially need to show creditors that you've learned to use credit responsibly. Unfortunately, your current credit report indicates otherwise. That information stays on your credit report for seven years, so really you have to accept that this entire process of gradually rebuilding your credit is going to take a few years. There are no quick credit fixes.

    I encourage you to look into a secured credit card. I like the Capital One secured MasterCard. Pay the full balance each month and try not to use more than 30% of your available balance. Do that and each month Capital One will report to the three major credit reporting companies that you have a credit card, you're being responsible with it, and that that you aren't actually using much of your credit.

    You could also look into the US Bank secured card, which I like because eventually (within 12 months, I believe) it graduates to an unsecured card. You could get it instead of or in addition to the Capital One card. Having two or more secured cards won't hurt your credit score *if* you're using them responsibly.

    I wish there were a quick fix. Unfortunately, this will take some time. Just remember that you are young, and this is an opportunity to learn a very valuable lesson early in your life. That's if you really do learn the lesson. Check out some books by Suze Orman. Scour this and the myFICO.com forum. Learn your lesson and you can have a great financial life ahead of you.
     

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