What is the best way to rebuild bad credit?

Question

Im 17 years old and I was stupid when i was a little younger and got some credit cards. I maxed out all of my cards not being aware that it would mean anything not to pay it back. I also got a few cell phone accounts and direct tv, hehe...i was only 15 or 16 and i was living on my own, i didnt know right from wrong then. Overall it is about $2500 in debt, will this be a major mark against my credit? And please dont judge me for being so stupid, i know it was a bad move now, and i have learned from my mistake. Now i just need help.....

Answer 1

Take some advice from someone who has been in your shoes; cut up your credit cards, never use credit cards again, and put as much money as you possibly can towards paying off your debts. Bad credit only stays on your record for 7 years, so if you pay your debts, and don't use credit anymore, your credit rating will fix itself.

Answer 2

That's an easy one. First, you must become debt-free (that means that you owe nobody anything). Then start rebuilding by taking out small loans ($1k, $2K) and LEAVE IT in the account. Use the money in the account, plus a little of your own money to pay for the interest(building credit is not free). Make regular monthly payments (this shows stability). This will take time (even years), and requires a lot of self-discipline (payment for your past mistakes). Make your first loan payable in 12 months or less, then, when it is paid off, apply for another one, with a larger amount, and longer term(time to pay it back). But don't excede your budget, because you still have to pay the interest on the loan (if you didn't already spend the money you borrowed).

That's it. GOOD LUCK BIG SPENDER

Answer 3

Start paying cash for everything you buy. If you can live without it, do so. If your utility bills, rent are paid on time fture lenders will take notice of your good behavior. If you declared bankruptcy it will take time to get over that, if the debt was charged off that will take time to heal, also. But if you pay cash for everything you buy you won't make the hole you are in any deeper. Stay away from get out of debt quick schemes or people promising to clean up your credit. If the info on your credit report is correct then those schemes are a ripoff of your limited funds.

Also you should get a second job and from today start saving the first 10% of everything you make. Pay yoursef first before you spend any of your paycheck. When you have savings emergencies like a flat tire don't become a financial emergency.

Answer 4

Since you were under 18, I'm not sure if these companies can actually hold you to your debits. The best thing to do is call the companies that you owe and see if they will write your debit off because of your age. If not, try to make a settlement for less than what you owe. In the end, you need to establish new credit and PAY ON TIME. It's the only way to bring your credit up.

Answer 5

Wow, to be only 17, gee I didn't even know you could GET a credit card that young!!! You need to pay them more than the minimum each month, put yourself on a budget, but don't close all accounts when you get them paid off. Keep one of them and purchase something, then pay it off completely by the next statement. This will help build your credit.

Answer 6

were you emancipated?if not as a minor your parents are responsible and all you have to do is say i was a minor and these bills are not mine, but if you were emancipated then read on.
The first step in rebuilding the Bad Credit

If you feel you need professional help for your credit repair and rebuilding you can contact your local credit counseling services. There re non-profit groups who can offer help. You can also reach your employer or credit union or housing authority for NO COST credit counselling.

Before beginning the process of credit rebuilding and repairing you must know your rights under fair credit reporting act, which will help you to decide on further course of action. If you are denied credit or insurance or employment then you may get a free copy of your credit history within 60 days of such denial. If you are denied of an opportunity for employment, insurance or credit based on inaccurate credit information you can take it to the credit bureau for remedy. This is free. But the onus of proving the correctness is on you. Getting the inaccurate information, if any, off your credit record will be the first step in the right direction for credit repair and rebuilding.

Credit card can be a tool in Rebuilding Credit

Taking the necessary steps to repair and rebuild your credit is the best way to ensure that you can enjoy the benefits of having a good credit card. You must always remember that having a credit card is a PRIVILEGE and not RIGHT. Be responsible while using a credit card.

If you have a not so good credit card, it means you are getting the best credit card rates and the various options available with a great credit card. That doesnt rule out the possibility of you enjoying a great credit card. With little patience discipline and time

You can improve your credit history.

Do you think that a bad credit rating on a credit report will prevent you from obtaining a credit card Don worry. There are a number of companies which will issue you a credit card.

Secured credit cards

This is a great choice. Secured credit cards require you to keep the money in deposit into the credit card account before the card can be used. Once the money is deposited into your account you will obtain some credit and the card can be used for the purchase. However the prepaid debit card or the secured credit card will not allow you to exceed the limit.

This enables you to begin establishing a good credit rating on the credit report while learning financial planning skills and responsibility. Also it prevents over spending and acts as an alarm system.

Other options Available

If you have good credit history it will help you get more credit at better rates. Thats a CATCH 22 situation. But how can one get a good credit when the credit history is insufficient even to get a credit card It is true that most major credit card companies are risk averse when it comes to issuing credit for not so good credit history. But there ARE options available for those with poor credit history but it may involve charges.

After all the credit card companies are there for making profit. They must lend money, collect it back, earn interest and be in business. Therefore those with no history of faithfully repaying the money that has been borrowed is avoided or graded as high-risk category and charged higher interest to offset the risk.

As in most trade there are various types of credit card companies that specialise in different segments of markets. Some Banks offer cards to those without a credit history. As these banks are taking on more risk with these customers and expect higher bad debts with this segment applicants have to expect to pay application fee, annual fee and usage fee for many of these products.

On the other hand it is worth the costs involved to finally get credit card and begin to establish solid credit history. Once you create strong track record then you can have your pick of the cards that pay you to use them.

Other options include retail store cards. Some of the Examples are store cards offered by Sears, The Gap or even gasoline retailer like Exxon-Mobil. They will often take a chance on new credit applicants where major credit card companies would not. Once your credit history gets better you can move on to major cards like VISA, American Express, Master card or Discover card.

So dont despair if you have bad credit and do not have credit history. You can turn it around by sheer perseverance and commitment over a period of time. It is the same as in the case of employment, once you get your foot in the door and pay your dues promptly, you can expect to move on to big and better things.

Before beginning the credit repair and rebuilding, analyse the problem in hand thoroughly, design a strategy, contact your financial advisors or counsellors to discuss for a best solution suitable for your problem. What is needed is the patience and financial discipline over a period of time to turn bad into good.

Answer 7

first, be sure you understand why you even want more credit. If you just want to get into more debt, then you should not do that.

the best thing to do is to forget about getting more credit right now. instead, work on paying off the debts you owe, and save some money.

over time, if you pay your bills promptly (phone, rent, whatever), and have no new problems, your credit will slowly improve.

Answer 8

Simple; pay it back. Good thing the card had a low limit.
Sounds like you learned your lesson; I'm glad I did not have the chance to get credit when I was young.

Answer 9

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RE :What is the best way to rebuild bad credit?
Im 17 years old and I was stupid when i was a little younger and got some credit cards. I maxed out all of my cards not being aware that it would mean anything not to pay it back. I also got a few cell phone accounts and direct tv, hehe...i was only 15 or 16 and i was living on my own, i didnt know right from wrong then. Overall it is about $2500 in debt, will this be a major mark against my credit? And please dont judge me for being so stupid, i know it was a bad move now, and i have learned from my mistake. Now i just need help.....
Follow 9 answers

Answer 10

you need to talk to a lawyer. aalot of them give free first meetings. I don't think that you can be held responsible for your debt since you're a minor. check it out.