I have less than 2000 dollars in debt but have terrible credit what can i do to get my life back on track?

Question

im starting a new job but it is bi-weekly pay. Would a loan help me and can i get one with terrible credit? I just want a second chance?

Answer 1

Only $2000? I will make that in TIPS in 2 months. I just took a second job delivering pizza to pay of debt. Tips are received in cash every day. A loan NEVER helps any one get out of debt. At best is changes the name of who you owe.

Answer 2

You don't need credit. Pay off the $2000 and then begin a savings plan. A good thing to do is to make two lists. One list will have things that you want. The other list will have things that you need. For example, you need food, decent cloths, reliable transportation and a place to stay. There's more to this list but, in contrast, you may want a Corvette or you may want a $300 pair of Guchi sunglasses.

Set up a budget to take care of the things you need. Budget for hair cuts, clothes, etc. Then take a few things from the list that you want, prioritize the list and start saving for them.

The only thing that my wife and I have financed is our house. And, I'm working on paying this off. We don't finance cars or have credit card debt. It seems at first that this is not possible but after completing a Masters Degree in Business and making the steps towards being debt free it really feels nice. I hear a lot of people tell me that "We can't do this becuase we don't make enough money". The answer is that they don't do this becuase they don't have any discipline.

Give this method a real shot, you'll be glad you did. As a last note, the only things that make sense for people to finance are homes and educations. Anything else is bad debt. Bad debt is borrowing money on a depreciating asset or something that is loosing value.

Good Luck.

Answer 3

A key to good credit is to have at least 4 or 5 credit cards with balances...but keep the balances under half of the limits. So, lets say you have a 1000$ credit limit, if you use that credit, spend no more than 500. Make monthly payments as well. Don't be late and don't underpay. Also, when you get cards that say no payment for 1 year, make advanced payments. Credit companies don't like seeing outstanding balances that don't have payments being made, regardless if it's a 1 year no pay period or something similar. It's also important to not go in over your head with taking out credit cards. Don't get so many that you feel overwhelmed. You also need to make sure you can spend the money each month on the payments. Remember, it takes time to build up good credit. Pay off all outstanding unpaid (if you have any) credits before you try starting over again. Good luck!

Answer 4

2000 In Debt

Answer 5

In the grand scheme of things, $2000 isn't that much debt. Since you're starting a new job, set yourself up a budget and live within your means. If you live below your means for a while, or get a part time job, you can have that knocked out in no time.

Take a look at Dave Ramsey's book The Total Money Makeover. It's a great book to help people get out of debt and on the path to investing and being able to live like no one else.

Answer 6

Pay off everything, and try not to get into debt if you can help it. I had a bankruptcy back in 1999 and now my credit score is 744. Only time will heal it. If you need to get credit, do it with companies that are not Payday check loan places. They charge the equivalent of 532% annual interest, and they will never let you get out of debt. It's legalized loan sharking.

Answer 7

The best book I read was Suze Orman's Young, Fabulous & Broke. It really helped me get back on track and figure out the best way to manage my budget and pay down my debt. Based on her advice, i doubt that she would recommend that you get a loan to pay off the $2,000. She would have you pay off as much as you can each month until it is gone. As far as restoring your credit score, while it is a slow process, it can be done. Using her advice I raised my score about 150 points over a year, and it is still going up. There is hope! Spend the $15 to buy her book or check it out from the library. I guarantee that you won't regret it.

Answer 8

Several things come to mind.

Get a credit card or three. Keep them under 25% balance (credit score goes down at 25, 50, and 75% of available credit per account). Feel free to keep one of them with a zero balance and cut up the card for that account. Part of the credit scoring is age of an account.

Get your credit reports from the three big reporting agencies. Work on cleaning up any false information. If you have legitimate accounts on there (medical bills, old loans, etc) try to get them paid off.

Try to keep from getting any negative marks on your credit (late payments, charge-offs, etc). The longer you go without new negative marks the more your credit score will increase.

If you have a home with equity, consider using a home equity loan or line of credit for large purchases instead of taking out new loans or using high interest credit cards. Often the interest on your mortgage will be tax deductible.

If you have bad credit history with that place where you have $2000 in debt, be sure to make your payments on time. As these delinquent items age they affect your credit less.

I use MyFico.com. It allows me to keep track of my credit reports but also provides a lot of helpful information on improving my credit score.

Answer 9

If you only have $2000 debt, I am envious of you. I wish I only had $2000 debt.

I need more information than you have given. Why do you have terrible credit? With so little debt, you should have good credit. What does your credit report say?

Answer 10

Make minimum payments on everything. Live on rice and beans and apply any extra money on your debt with the smallest balance. When it's paid, go to the next smallest. Get everything paid off and start a new life, debt-free. For more, go to daveramsey.com.