HELP!!!!what are small baby steps i can do to boost my credit?

Question

i cant pay off my medical collections because im paycheck to paycheck with 2 kids and a house, i have 5 credit cards all with different balance all with close to their limit, i feel like everyones advice is great but for someone who has enough money to do what they say, i dont qualify for loans because of my debt to income ratio killing my credit however i always pay alittle more than minumum on cards and on time I was late once in the past year on one card. I need to feel like i have hope but it just gets worse what are small things i can do? i NEVER go out so its not going towards any entertainment for me its all in bills and daycare and food and supplies HONESTLY i never even treat myself to a rented movie and a lunch out!!I need help but not debt consolidation companies ive done my homework on that and i have gotten feedback of experience where they ended up paying more anyway and other horrors, any small suggestions of where to begin?

Answer 1

You're very smart not to consider debt consolidation for the reasons you mentioned.

First - get yourself on a written budget. Give every dollar a name and a mission. You can control your money or your money can control you. List essentials first like rent, food, utilities, and such. Then list your debts.

Second - stop using the cards.

Third - get 1000 dollars in an emergency fund. This emergency fund will take a load of stress off of you and you won't need the cards if Murphy pays you a visit. Murphy visits all of us from time to time.

Forth - list your debts from smallest to largest. Pay minimums on everything except the smallest. Pay the minimum plus extra on that one until it's paid off. Then use the money from the smallest debt and apply it to the next smallest. Snowball through each one of your debts.

Answer 2

I gotta agree with most of the others that already answered. Either another job part time in which you could use that money for the credit cards. Or Like others have answered, a debt consolidation loan. I got into a little trouble with credit cards when I was in college and I went the way of the consolidation loan from my bank and the interest rate wasn't bad and I didn't have the companies calling me all the time for their money. It was sure better than just putting all the other cards on one. Finally pick out the best card of the 5 and keep only that one. Cancel and cut the other 4 up. Too many cards = too much trouble. I have my ATM/Credit/Check card from my bank and one credit card that I use for emergency.

Answer 3

Never mind debt consolidation places. You can do it on your own. There are several ways to go about it. My best suggestion is to choose the card (or other type of debt) with the highest interest and pay as much as possible on it every month, and pay the minimum on the rest. When that card is paid off (and make sure you save your documentation of it), start on the next highest interest rate, etc, until they're all paid. If you can get a consolidation loan with a lower interest rate, do that. HFC/Beneficial (HSBC) will lend money to almost anyone, but their interest rates can be high and you do not want to miss a payment. If you are going to go this route, make sure your payments are on time. One huge thing people look at is if you have any late payments within the last year. Another, less desirable option, is to let your debts go into collections. Once they are delinquent, you can usually settle them for about half of the balance (which is usually higher than your original balance due to collection fees). Between now and the time you offer a settlement, you can set aside as much as you absolutely can for the settlements, so you can make the lump sum payments. This is definitely the less desireable option, as it will take your credit score a year or so to recover after your last settlement is made (and settlements look less favorable of your credit report than paying the balance in full). However, it will ultimately cost you less out of pocket. A couple of warnings - don't ever get a payday loan, and don't ever use possessions as collateral (ie. using your car or house) for unsecured debt.

Answer 4

You have received a lot of advice. I am sure it is a lot to sift through.

First, I think that you should know that having a good credit rating does you no good unless you are looking to get a loan.

In a situation like yours, with medical bills that you can't pay and reliance on credit cards to just make it through the month, you should really look at bankruptcy. If you own your home, you might have to take out a loan to pay some of your debts, but if you are a renter, you won't.

After filing for bankruptcy, start putting away as much as you can into a savings account. That way, you are able to meet the unexpected expenses. Then you will be able to start over. It will take 7 years for your bankruptcy to disappear from your credit score, but after 3 years it should be higher than it is now. And you will be living under less stress during those 3 years.

Also, look to the government to see if you qualify for help with housing, daycare or medical bills.

You might want to seek help from some charitable organizations as well.

Answer 5

Know the situation well. Pick one card either the highest interest or the lowest amount and pay double the minimum on that card, if you get a little OT or a tax refund apply it to the cards. when you get it below 30% of the limit, chose another one and do the same. Make sure you pay them by the due date, better if a little before. It takes time and is not easy, believe me.As the balances go down the fico points will go up. DO not apply for any loans as that takes points away, and do not close any cards that you happen to pay off. Hang in there and good luck

Answer 6

First off all you need to carefully review your credit report and look for errors. If there are errors in your favor then correcting them will boost your score.

Next up is to start paying down those debts which is hard on a tight budget but your score will go up approximately 1 point for every 1% of total debt paid off.

Being close to you limits trashes your credit score so resort to charging only in dire situations.

You may want to call your creditors and see if they will either lower your interest rates or raise your limits. If they can do both it will be great. Once your limit is raised do not use those funds. This is the only way you will raise your score without spending money because a portion of your score is based on how much of your available credit is in use.

Answer 7

Sounds overwhelming, and you are getting mixed advice. I have worked in finance for over five years from credit collections, to lending and have heard many similar stories to yours.

There are lots of ways to approach this. Since you are a homeowner, you may be able to take you a home equity loan, home equity line of credit or even a fixed 2nd mortgage. This would combine your debt into one payment, the interest rate will be lower than your credit cards, and may also be tax deductible!!!

If you don't have enough equity in your home to do that, here's my other advice.

#1. Don't be ashamed to ask for help. Have you tried to apply for food stamps, or any other kind of government assistance? You'd be surprised how that can free up money to help you pay debts!!!
#2. Get on a budget you can stick to.
#3. Do not settle on any accounts, this will negatively impact your score.
#4. Do not close any accounts, closing them now will increase the ratio of debt and hurt your score.
#5. Call your creditors and ask them to reduce your interest rate. Lower interest will get them paid off faster.
#6 Everyone else who said this was right on the money...KEEP PAYING ON TIME. PAY THE MINIMUM ON ALL OF YOUR ACCOUNTS, AND PUT ALL OF THE EXTRA MONEY ON YOUR SMALLEST DEBT. ONCE IT IS DOWN TO 30% THEN START APPLYING YOUR MONEY TO THE NEXT SMALLEST DEBT.

Answer 8

If there is anyway you can get a part-time job or earn extra money from home I would try that route. By doing this you can pay more towards your balances. Also, pay the bills on time that reflect good on your credit. You can also try calling your credit card company explain your situation and ask if there is any way that your interest rate can be lowered.

Answer 9

Seems like you have to get a new job or take up part-time work. Another suggestion would be to apply for a debt consolidation loan. These loans are usually honored on your credit worthiness and not the debt to income ratio.

Answer 10

I don't think it will help much unfortunately. This case was resolved because it was largely publicized and authorities didn't want to look bad in front of the rest of the world. Just look at how much legal hassles it took. Obviously the judge sympathized with the husband, not with the girl. But marrying nubile girls is not considered paedophilia in Muslim countries. It is a common practice, though they try to be very discreet about it. Not only do fundamentalist Muslims consider women as goods to be traded between men. But the Prophet Muhammad himself set the example that every Muslim is bound to follow: "(The Prophet) married then Aisha who was a 6 years old girl; she was 9 years old when the marriage was consummated." (as narrated by Hisham's father, Bukhari LVIII 236). So that regardless of secular law, no Muslim on Earth consider it a sin or a crime to marry a nubile girl. It is considered to be a man's right an duty. Edit: Does anyone see that someone is proving me right ? Whoever dared to thumb down all the answers above down to mine ? All answers express disapproval one way or another. So they have to be thumbed down by someone who is comfortable with the idea of marrying a child...