Question

What are some good ways to turn around bad credit? I can't afford to pay the bills that I owe right now!?

But I was hoping to find some ways of building my credit even though it is already bad. I am hoping to eventually pay the debt that I owe, but what can I do to be helping my credit in the meantime....Please no smartazz answers like PAY THE BILLS! Cause if I could afford to trust me I already would! Thanks!

7 years ago - 7 answers

Best Answer

Chosen by Asker

The smartass answer is the correct one. Until you pay the old bills off, your score will not get better. Period. There is no magic bullet or miracle cure, anyone who suggests otherwise is full of sh!t.

My advice would be that if you can't afford to pay the old debt, you don't need a credit score at all. It doesn't matter if your score is zero. What you need to do is get on a written budget. Give every dollar of your income a place to go; spend it all on paper before the month starts, and don't spend one penny that is not on that piece of paper. That will identify how much extra money you have to clean up your debt.

The next step is to list all of your debts from smallest to largest. Pay every extra penny on the smallest debt, and pay the minimum on the rest, regardless of interest rates. Interest is not your problem; spending is. When the first one is gone, use that payment, plus the minimum you were paying on the second smalest, and attack that one. Keep doing this until they are all gone. Cut up all your credit cards and never borrow money for any reason whatsoever, except to buy a house, and you will never need a credit score again.

I get my paycheck in cash every week now, because I only have my truck to pay off. I have half of last week's check still in my wallet, which will go to the truck Monday. That will be two truck payments so far this month, and it's only the 10th. How would that feel, to have most of your paycheck left when the next one comes in?

EDIT: Using a debt management, or debt consolidation company has the same effect on your credit score as a bankruptcy. Those ads you see on TV from lawyers and debt consolidation companies, promising to settle your debt for pennies on the dollar, will reflect on your credit report in the exact same way as if you file Chapter 13 bankruptcy. There is absolutely no advantage, whatsoever, in using them. There are many disadvantages, like them not making the payments on time, though. They are notorious for this.

Source(s):

7 years ago

Other Answers

Try a credit management service. That would be the best option with your goals. They can negotiate your late payments and take off some of the fees (with a few on-time) payments. There are a lot of things they can do to help you.

There was just a show on MTV True Life about it and it was really informative of the different options.

by bbrzt - 7 years ago

One option is to work with the Credit Bureau. They'll negotiate for better terms and longer repayment period for you. That mean you still need to pay up. Meanwhile, get yourself a second job if you've got a day job. Be forewarned that when you work with Credit Bureau your credit score won't look good so you need to think carefully.

by SG Elite - 7 years ago

you have already built your credit sweetie..it is just bad..pay the bills or settle them.even if you pay $25 a month..thats still paying. there is no quick way to undo bad credit!
pull your reports and dispute them. be proactive. then once you get out of debt, dont get back in!! budget your money. i could go on and on with this one..LOL

by truthhurts - 7 years ago

Bad credit is one of the worst problems to have... however there exists a solution.

I will hereby talk from my personal experience.

I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details,
if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,

a good place to start in my humble opinion is astraight to the point ebook with question and answer I found :

umgarticles.atspace.com/debt-consol...

if it helps kindly remember me in your voting!.. cheers!

by gabriel jones - 7 years ago

You can repair your own credit for free. It is not magic, it takes knowledge, persistence, and hard work. Utilize the law (FCRA).
www.creditinfocenter.com is good.

by flagmagnets - 7 years ago

The best way to build your credit back up is to get new active tradelines that have no late payments. Unfortunately, when you have bad credit, you'll usually get turned down when you apply for a credit card or a car loan. When you do get approved, you'll get hit with high interest and fees.

The least expensive way to build good credit back up is to become an authorized user on another person's card. As long as the main cardholder is making the payments on time, it will help your credit score. If you're not able to do that, get a secured credit card. A secured card means you send a bank money, they hold it, and you can charge up to the amount you send in. Make sure they report your payment history to all three credit bureaus.

Other than that, if you still have credit cards or an auto loan that haven't gone to a collection agency yet, get current on them and stay current! If you already have accounts that have been charged-off or in a collection agency try to get them to remove the negative item from your credit report in exchange for paying it off. The older the account is, the higher the likelihood that they will work with you. If a collection account many years old, it may be best just to do nothing, as negative information in most cases is removed 7 years from the date of your last activity. That means if you stopped making payments on a credit card in June of 2000 and never made a payment again, it would be removed from your report in July of 2007 (7 years from the time you first became 30 days late).

by azjohn2001 - 7 years ago