I have REALLY bad credit! What can I do to fix my credit score within the year?

Question

I have made alot of mistake in the past on my credit and now I am looking @ a debt of around $35,000 (including student loan) and a terrible credit score. I am not planning on a major purchase in the next year or so, but I would like to be able to make some improvements (maybe 100+ points if possible) Any ideas or sure fire methods to improve credit?

Answer 1

Concentrate on paying off the loans - consollidate the debt if possible. Try credit counselling sometimes they can consollidate and reduce some of the debt. Just remember if you don't have the money you can't buy it!

Answer 2

I would reccomend sending a letter of dispute for EVERYTHING in your credit history. Most of it will be dismissed, but some creditor may not respond in time and so that particular charge would be removed from the report. It's a long shot, but paper is cheap. Pay off small debts, and possibly even negotiate settlements (credit card companies do this all the time...they will settle for a percentage of what you owe).
As a last resort, you could opt out of the social security program for a while. Paying into social security and having a SSN is and always has been 100% voluntary. You could drop the SSN, and you'd never have to use it to identify yourself ever again. A year later, apply for a new one (or if you already have a driver's licence, just remain without one).

Answer 3

Hard to say without knowing the specifics of your debt but here's some ideas:

1. Face your debt issues head on. Assess your debt situation and develop a strategy to pay it off. Be realistic -- $35k is a lot of money and it could take years depending on your cash flow and interest rates. Start with the loans having the highest interest rate. Pay this loan off first and then roll the first loan payment into your next loan. Do not abuse credit card debt or take on any new loans. Work hard to increase your income.

2. Don't get rid of credit cards but don't use them up to the credit limit. Always pay whatever you've charged the previous month in full. This behavior begins to rebuild credit by demonstrating the ability to make timely payments and manage your credit limits.

3. Create a budget and stick to it. Pay yourself first each month by putting away a small amount in savings. Even $5/week to start can establish the habit of saving and provide a cushion for unexpected expenses. When building your budget, challenge yourself to distinguish between needs and wants. The "wants" should be on hold for a while.

4. Become a student of money & personal finance. Stay focused and confident. You seem like a smart person and I know you can do it. Go get 'em!

Answer 4

There are some companies which speacialise in settling credit card debts. Contact one of those. What they do is they will goto the Bank and say hey this person cannot pay you back this amount, but we will give you $ 5000 to settle this. SO effectively you pay them the $5000 and they let you go from the $35000 debt. So try this. I am not sure about the name of the company but you can see on TV there are a lots of Ad for these.

One more thing you can do is, get a credit card and try to increase the Credit line amount and pay off each month the amount you use. Do this for some time and you will see your credit scored improve.

Answer 5

Unfortunately, damaging credit can take place easily and quickly, whereas repairing it can be a more lengthy and challenging process. My first suggestion would be to utilize your free annual credit reports, and use them to initiate challenges with everything derogatory on each of them. You need to order a separate report from each bureau (TransUnion, Equifax, and Experian) and the ID number will be your gateway to doing the online challenges. In general the bureaus wrap up these investigations in about 30 days or so, and delete everything that has been challenged, unless it has been substantiated by the creditor that reported it. After that has taken place, you will then most likely have a smaller batch of problems to resolve. Find a good mortgage consultant (like me - but I'm not advertising) who can then work through the process of identifying where you will get the most "bang for the buck" in anything you decide to pay off. Also see if someone with established credit will add you as an "authorized user" to their accounts - this should have the effect of raising your score. As far as applying for new credit, try the gas companies, as they can be lenient on their extension of credit - and also consider a small secured card. Make sure to get one with the least painful fees and one that does not charge a "monthly participation fee." Finally, make sure that your revolving debt (credit cards) accounts are half or less of the approved balances - 33% or less is probably ideal, but use the "half or less" as your rule of thumb. So, if your approved limit is 1,000 on a given card, make sure that your balance is less than 500, etc. The process can take a bit of time, but it is very possible to accomplish the turnaround you seek. I hope things work out for the best!

Answer 6

all you can do is work hard to build your credit back, which will take more than a year.
just don't be late on payments, try to call the companies you owe (like credit card companies) and see if they can lower the interest (which is a long shot)

just pay it off! that's all that you can do right now to get a good credit score

Answer 7

you need to hire a Lawyer to help with cleaning up your credit. and you may need to a financial adviser so you won't let this happen to you again. getting small loans from your bank, keeping the money for about one or two months (make a payment or two) then return the money and pay off the bills. Or conciliating your bills, get a loan to pay off all your bills, then you have one bill to pay this may save you money on a monthly average, but most likely not in the long run. Most likely it will take you up to 5 years if not longer to get a better credit report, because it goes back 5-7 years. good luck.

Answer 8

Simple: -

1) No new credi card applications...
2) No new purchases on the credit card (FREEZE THEM RIGHT AWAY)
3) More than minimum payments on outstanding Credt Card Balances
4) Student loans are not like credt card loans. ( different category all together). Keep paying whatever minimum it takes for this category (probably a 25yrs any ways). Does not affect CC score as much.

Answer 9

Gather ALL of your debts and get them consolidated through a credit couseling firm. Then you should be able to start making monthly payments on a regular basis. The more payments you make the better your credit will be, just make sure they're on time and not late.

Answer 10

You can contact the 3 major credit reporting agencies and get copies of your credit report. You can pay things off with pymt. plans and maybe get a gas card. Pay that bill off in full as soon as you recieve it. This will help your credit rating. Good luck!