I'm 26 years old and I have bad credit. My total debt comes to about $8000 I have been financing a $11,000 car since December last year with 17% interest because of my lack of credit. i get denied for pretty much anything i sign up for including renting apartments. I have had 2 credit cards about 300 limit each that i didn't fully pay, and 1 loan from when i was 19. I pulled my credit report and there are 8 CO's on experian credit score 491 eeeek! Equifax i have about 5 CO's and on Transunion about 8 CO's. Now i checked the dates and about 4 of them will be off my report by next year. I was told that paying my chargeoffs will not increase my score. Which leaves me with the question what will?? Note: If there is a thread that can help me please direct me to that thread. Not trying to make anyone reinvent the wheel. Thank you =)
The good thing is that you're still young and have plenty of time to improve your credit. You just need to learn some basic principles of wise credit management and stick to them. Ready? Always live within your means, and always pay your credit card bills in full and on time. If you can do those 2 things, you'll never find yourself having credit problems again. Remember, you shouldn't buy anything on your credit card that you don't already have cash for in the bank. So, there seems to be a spending/budgeting problem you need to address too. If you have $8,000 in debt, you shouldn't be buying an $11,000 car at 17% interest. Can you sell the car for enough to pay off the existing loan? I'm guessing probably not since you just bought it in Dec. and it might be worth less than you owe now. Anyway, the idea is to free up as much of your income as possible to pay off debts and put yourself in a position where you can begin rebuilding positive payment history again. Buying a car you can't afford at a high interest rate doesn't help your cause. You also need to start cleaning up your credit reports, which will take some time and patience. Dispute inaccurate or missing information through the CRAs, and start dealing with the collections/charge offs that won't be dropping off your reports in the near future. And while you're right, a paid collection won't do much to improve your credit scores over an unpaid collection, you may be able to negotiate removal of the negative listing as part of your agreement with the CA. Once you clean up your reports as much as possible, then you can start worrying about get a secured credit card to rebuild your credit. You might also look into convincing a relative or close friend to add you as an AU on one of their old cards in good standing. That should help give your scores a little boost as well. Good luck on your journey, and please come back often to ask questions and keep us apprised of your progress!
