Hi, everyone: First-time post--apologies if something like this has been posted before. I looked and decided to just post. So, long story short I worked hard to restore my credit and it was in the 720s, which was great because I needed to move and secured an apartment. My rent/bills are paid on time, nothing in collections, but...my score has gone to 516. Why? High CC balances, either being over the limit or close to it. I'm currently about maxed out, with about $14,000 in debt. I totally dug myself in a hole without meaning to and am trying to cut back on spending and paying every penny I can to help pay it down. I have three cards--one with $10,000, two with $2,000 each. AmEx is the biggest balance; Discover Card and my Chase Bank credit card are the others. (The good news is that I recently paid off my student loan, but the amount wasn't so much that it makes a dent.) Adding complication to this is that I want to look for jobs in my field and may need to relocate in the next few months. While my lease isn't up until next August, I'll receive a renewal letter from the management company in April and will have to decide within, I believe, 45 days from receipt. So, with all of that said (and thanks for reading through that!) here are my questions: 1. As the balance is the big problem, if I can get this paid down, will it improve my score in a relatively reasonable amount of time? How much will I have to cut it down, and how quickly, to start to see results? 2. Aside from budgeting, is there anything else I can do? Are Amex and Discover amenable to folks trying to pay down their debt and doing things such as lowing their interest, etc? 3. If I have to decide to move in the next few months, any tips on finding a place to live with this crap-tacular credit? 4. If I re-sign my lease, but have to move, how badly will breaking my lease hurt me? (Not sure if this is related--most likely a question for the management company.) 5. Any other budgeting/cut down ideas? I have a periodic freelance job and other than that, I work long hours during the week at my day job, so not sure a second job is possible. I recently received a raise and while one of my two monthly checks is almost exclusively dedicated to rent and my monthly rail pass, my other check is about $1,500, before any expenses. This is totally stressing me out. I don't have a lot to sell (anything, really, of value) and I don't have a gym membership or anything much to cancel--just electricity, groceries, money to do laundry, phone, cable/internet, which I'm going to try to cut down on this afternoon. I hope this is enough info for everyone. Thanks in advance for your help!
No reason to apologize...hopefully I can help. 1.) Paying your balances down and lowering your credit utilization ratio will have a huge impact on your credit scores in a short period of time. Get your CU ratio down under 30% and then you should see results. 2.) I wouldn't count on them lowering your interest rate. You might consider moving high-interest balances to a 0% interest card and paying it off during the 0% interest period. If you plan carefully and stick to your own payment plan, this can save a lot in interest. 3.) Look to private landlords instead of big apartment complexes. If you have a stable job, many private owners will look pass the credit issues. 4.) Don't break your lease. Work something out with the mgmt company or go month-to-month until you can figure out your situation. 5.) Share a more detailed breakdown of your budget/expenses and we might be able to provide more guidance. If you're looking to cut some extra expenses, definitely get rid of cable though. I got rid of it years ago and haven't missed it (or the monthly bill) one bit.
#3. Some landlords only check to see if you've had an eviction. Be honest and ask them over the phone what their renters background check looks for. They should tell you. And don't feel bad. I had a friend who had a straight-up eviction with garnishment of her wages from a court order and she was still able to move into a brand new apartment building on the good side of town. She was turned down left and right from other places, but they looked at what her job was and how long she had been there and how much money she made. Also, try renting a home/condo. Or independent landlords as the above poster mentioned. They have a tendency to look at the 'over-all' picture. Good luck!
Thanks for all the details - here's what I would suggest: 1.) cathyG is absolutely correct. Once you get your debt under 30% of your cred. limit on all cards, you'll see a major boost (over time) in your credit score. 2.) cathyG is spot on here, too. If you can afford to pay the minimal transfer fee. (approx. 3% of the debt you're moving over), you can move over some of your debt to a card with an extended 0% intro period, that way you can begin paying off the debt directly rather than the interest. 3.) If you're relocating w/ a job already lined up, the landlord/mgmt will probably request some sort of letter from your employer confirming your employment. (In place of a past paycheck or something liker that.) Income is generally more important to landlords than past credit. 4.) Agreed w/ cathyG once more. This is a pretty standard question ('Have you ever broken a lease?') when applying for a new apartment, plus they'll likely ask for your last landlord's contact info as a reference. If you have to leave your current living situation early, I'd recommend trying to find a subletter to take over before breaking your lease. That way you can maintain your renter reputation while also giving you great shot at getting your deposit back. (Make sure to work out something legitimate with your landlord, with signatures between you and the subletter so that it's clear who's responsible for what on the apartment.) Hope this helps! Let us know if anything else comes up and we'll see what else we can do.
Credbunny, If you are looking for other ways to cut your budget and pay off your debt more quickly, you should be read my article I have posted previously in the general discussion section of the forum. Habits of Highly Frugal People Thanks! Heather with BoostMyScore.NET
