How can I fix my credit permanately ?

Question

I'm twenty five years old and still in college. I have about $8,000 in credit card debt. I have about 9 maxed out / over the limit credit cards. I have been unable to make my credit card payments for about 8 months due to being out of work , moving, and other personal problems. A couple of my credit cards have been charged off and I don't know what to do. My family can't help, and this has DESTROYED my credit. About a year ago my beacon score was about 640, now I can't get approved for anything. This is horrible, needless to say, lesson learned. I just want to have one regular credit card and maybe a gas card from here on out. I don't know if I should try to consolidate my debt, give up and not worry about it for three more years until I get out of school, but then I have to start paying off my student loans, HELP !!!! Nobody can give me any answers that I need. I just want a fresh start. I want to buy a house someday.

Answer 1

I was in the same situation you are in about 5 years ago. I got in with Consumer Credit Counseling (CCC) program and they negotiated lower payments and interest rates for me on my cards and I was able to crawl out from under the crushing debt load.

Since then, I have been very careful to make all my payments on time and..most importantly (they don't tell you this) make sure you DON'T max your cards out. Your credit score is based on how much credit you have available vs how much you have used. So keep your balances low.

And don't wait for three years until you are out of school. You should start now, so you will have three years of good payments showing on your credit when you are ready to get on with life. Otherwise your hands will be tied.

Answer 2

Go to a bank and talk to a credit/debt counselor or ask the bank for a REPUTABLE debt counseling service. They may be able to help you negotiate your payments so they are reasonable. Credit cards want to get your money and if they know you're in a bad situation, they may be willing to work with you.

Regardless, until you get these debts settled and/or declare bankruptcy (which I personally find irresponsible), your credit is going to have issues for up to 7 years.

You need to cut up all your credit cards and start using a debit card for your purchases. When things are under control again, get a SECURED credit card from your bank as soon as possible to start re-building your credit. A secured card is backed by your bank balance and protects the bank.

The thing to do now is to live within your means and focus on graduating college and getting a job. You've screwed up but if you re-organize yourself and do some reading on managing your finances, you'll be ready and prepared to buy a house.

Answer 3

Well you can try those CCC agencies and they will help negotiate lower monthly bills but keep in mind (most people don't know this) they are funded by CC companies to get their money back. So it won't improve your score permanently...640 was good. My score is 800. (Not rubbing it in so don't think that) It also depends on the laws that your state has in place...I'm not sure how long you have had that CC debt but in some states they will remove negative reports from your report if the statute has expired ( let's say you owe 2Large to one card if it's been X amount of years it wouldn't make sense to make payments on it because they would be forced to remove it from your report by state law, so it would make sense to not make any payments on it) It's the American dream to own a home...I'm 25 and 3 months ago I bought a brand new home.. i wish i could tell you more but i need to go...Good luck and I hope you get your fresh start.

Answer 4

CCCs can be scams. Credit card companies don't have to agree to their terms. Remember, too, that just because your account has been charged off doesn't mean you don't have to pay it any more. You have an obligation to do so.

$8,000 debt is hardly insurmountable, but it will take time. You will need to call each of the credit card companies yourself and ask for settlement amounts. Get them in writing. Get yourself a part time job while school is in session and a full time job while it's out.

Make a budget every single month. After you've paid rent, utilities, and food, throw everything you can at your credit cards. To figure out which to pay first, write down the amounts owed in order from lowest to highest. Pay the lowest off first.

You can do it!!

Answer 5

Important. Please read carefully.

1) You're heavily handicapped by the fact that you're 25 and still in college. You don't have a good head start but don't worry.

2) There's a difference between being poor and being broke. Being broke is temporary. Being poor is permanent. Don't worry, you are broke and not poor.

3) You need to plan your career STARTING AT THIS VERY MOMENY. You need a adopt a very different strategy if you wish to succeed.

4) Choose career paths that are slightly more niche and have a great demand for. If you go for the typical accounting/CPA/IT/Finance paths, chances is you're going to get a rude shock when you graduate at the age of 28. The companies might not be so willing to give you a shot at the job reason being that they might rate you as a 'Slow Learner'.

5) Instead go for things that are slightly more niched. Easy studies on Nanotechnology, Robotics, Seismology or anything that embraces fresh graduates.

6) You might want to dedicate 10% of your spare time to do something different. E.g. pick up skills in web design, search engine optimization, internet marketing, affiliate marketing...etc to try to build up some passive income. Don't be dependant on carving a career based on what you're studying now.

Important quote from Yours Truly.

"You Are What You Want To Be" - Edmund Ng

A waiter is a waiter because he chose the job. Nobody points a gun and forces him to take up the offer. Similarly you are in your state because you chose to spend your time on other things in the past.

Remember, Bill Gates, Michael Dell are Billionaires and successful because while every teenage kid were having fun and enjoying themselves, they chose to spend the time something they were passionate about. They literally bury themselves in their garage and the rest is history.




Regards,

Edmund Ng
CEO, Founder
Infinique Technologies
http://www.infiniquetech.com
http://www.itjobs.com.sg
http://groups.yahoo.com/group/sg_it_jobs...
http://www.purchaseresume.com

***This is my signature. Not an advertisement.***

Answer 6

NOTHING you do good or bad affects your score PERMANENTLY. Everything eventually becomes old news and stops affecting your credit. The best source of tips to improve your score that I know is http://www.myfico.com/ This is from the company that developed the formulas used by the 3 Major credit bureaus to compute credit scores. They should know better than anyone what impacts your score the most.

Answer 7

Everything ShirlD said is correct.

And remember this, "You can NOT fake the harvest!"

If you want a house, you will have to address all of this debt first. When you try to get the house (harvest) without planting the seeds of responsibility and accountability, all you will seem to get is ugly weeds.

Fix bad habits.
Fix credit history.
Get degree.
Get house.

In that order! When you try to get the fruits of the harvest ahead of schedule, you only set yourself up for a let-down!

Answer 8

Poor decisions lead to bad situations don't they. There is no magic bullet. You're the one who created your bad credit history not your family. So, you're the one who will have to fix it. Stop school, get a job and get your credit back on track. That's not what you wanted to hear, I know, but the only way to deal with the situation is to deal with it.