My credit is bad how do I get it better

[Luckyflux]

My credit is tanked big time. Too many mistakes while I was young. Now I am trying to repair it, but how do I do that?

I tried to get a credit report and I got mine sent to me, but how do you read it? It has alot of entries that I cannot figure out. Would a professional be able to help me out? If so, then who? laywer, accountant, agency? I don't anything about credit and finances, and stuff like that.

I would like to pay off everything that I owe, but I don't know how to do that.

Does anyone have any advice for how to fix a messed up credit? Ideally I won't have to pay or hire anyone to do this for me, but I will if I have to.

 

[Brent]

Just pay off everything you owe, that is the best way. Call the card companies to whom you owe, or the collection agencies, and setup a monthly payment plan on the things you owe, pay what you can each month until they are paid off. It really is that simple, believe me, they will take your money, just pay what you can.

 

[Bears Discover Fire]

The advice I've heard is to: cut up your existing cards, pay off any outstanding debts, then, ONLY if you trust yourself with credit or you can even get a card, open 1 (and ONLY 1) credit card with a small limit. Charge no more than 1/3 of that limit per month, and pay it off in full ASAP. Pay cash for everything else.

If you can't afford to pay in cash, then you can't afford it, period.

Credit repair takes a long time and a lot of discipline, and can only be done by you. People who claim they can repair it quickly for you are scammers.

 

[John Picard]

The advice I've heard is to: cut up your existing cards, pay off any outstanding debts, then, ONLY if you trust yourself with credit or you can even get a card, open 1 (and ONLY 1) credit card with a small limit. Charge no more than 1/3 of that limit per month, and pay it off in full ASAP. Pay cash for everything else.

If you can't afford to pay in cash, then you can't afford it, period.

Credit repair takes a long time and a lot of discipline, and can only be done by you. People who claim they can repair it quickly for you are scammers.

http://www.daveramsey.com

I haven't had a credit card in over 3 year, and much to the horror stories people here paint, it hasn't affect my purchasing power at all.

By next year, I plan on being debt free with a small mortgage on the house that will be no more than a 5 year term.

 

[RoJoHen]

Really, you just have to pay off your existing debt without adding more. Depending on how much debt you have, it could take a long time. If you can afford more than the minimum payment on your credit cards and loans, pay it. There's no quick fix. You just have to pay your bills, and pay them on time.

 

[Scout101]

It's not tricky: Pay the people that you own money to, and stop taking MORE money from people when you can't pay them back. Pretty much just keep doing that, and it'll be fixed...

 

[Cornholio]

Just pay off everything you owe, that is the best way. Call the card companies to whom you owe, or the collection agencies, and setup a monthly payment plan on the things you owe, pay what you can each month until they are paid off. It really is that simple, believe me, they will take your money, just pay what you can.

and when you call, tell them to close your account until it's paid off. if you can, offer a lump sum settlement. I accumulated a lot of credit card debt in the 90's. I was able to settle a couple of accounts by making a lump sum payment of about 50% of the balance owed. it isn't easy to get them to agree to this, you'll really have to stand your ground, but you'll save yourself a lot of money that you can use to pay some of your other bills.

also, try to consolidate your credit card debt using low interest balance transfers. these can save a lot of money and most card companies, and banks offer them. ask about these when you call. I've saved a ton of money by consolidating all my cards with one 0% offer after another.

If you can't afford to pay in cash, then you can't afford it, period.

yeah, that's the golden rule to follow. I rarely carry much cash, but use my debit card for most purchases.

I do carry credit cards as well, just so that I can use them for small purchases once in a while, and then pay them off. I'll rotate my cards so that each one gets used once or twice each year. using your cards and then paying them off helps build up your credit rating. and if you don't use them at all, the issuing bank or card company will turn them off altogether.

it took me 5 or 6 years to clean up the mess I made in the 90's, but I've had a great credit score for the better part of this decade. it just takes discipline.

 

[greenguy]

Always, always pay more than your minimum payment, as much more as is possible, and do not wait until the last few days of your cycle to do it. Even if you make just the minimum payments on time, your credit can still suffer.

 

[Mallory]

If you can't afford to pay in cash, then you can't afford it, period.

Count me in this camp as well. Too bad that there's generally some suffering involved before the lesson is learned. At least there was for me anyway.

I haven't had a credit card in over 3 year, and much to the horror stories people here paint, it hasn't affect my purchasing power at all.

I still carry a couple (no annual fee/$1000 limit) around with me, mostly just because I'm lazy.

 

[propita]

My sister declared bankruptcy years ago. Ruined her credit for years, right? Nope.

Her husband inherited a not-huge amount of money, but it was enough to allow a down payment on a house and car (theirs was crap and they live in the LA area). They refinanced a few years later, at a lower interest rate, and the car was financed through their credit union with automatic payments from her job.

After just 3yrs, their credit rating was around 700. It's higher now after 10 yrs.

 

[Bears Discover Fire]

If you can't afford to pay in cash, then you can't afford it, period.

Count me in this camp as well. Too bad that there's generally some suffering involved before the lesson is learned. At least there was for me anyway.

I haven't had a credit card in over 3 year, and much to the horror stories people here paint, it hasn't affect my purchasing power at all.

I still carry a couple (no annual fee/$1000 limit) around with me, mostly just because I'm lazy.

I've pretty much have always been cash-n-carry, and I've never had a major problem with my credit. The most debt I've ever carried was some relatively mild medical debt, which is long paid off.

I had a card that was cancelled due to inactivity, so I opened another for emergency use that I use very occasionally - it came in handy 2 months ago, when I unexpectedly had to rent a car and drive 500 miles in an afternoon. Rental agency wouldn't take debit for deposit, so the card got me the car & got me home so I wouldn't lose my job.

 

[Mallory]

Stuff for my kids often presented unexpected expenses, especially when I was a new parent.

 

[Agent Richard07]

I use a credit card for everything I can because I get points. Then I pay it off in full every month, so basically, the credit card companies are paying me. Credit cards are fine, so long as you don't spend money you don't have.

 

[Chaos Descending]

Pay your bills.

 

[Captain Ice]

Make sure your bills are paid on time.

 

[ebusinesstutor]

I worked in a bank for 13 years and I would recommend you look around for a nonprofit credit counseling association. They help with education and advice and can teach you how to read your credit bureau.

If your bank is helpful, you might be able to set up a loan to pay all your debts off plan for your debts and you would only have one monthly loan payment.

If your bank won't help, you might have to negotiate with your creditors (the credit counseling group can help with this) to set up a payment plan. Some creditors will actually take a lower amount if you offer it. For example, if you have a creditor bothering you, that you owe $1000 to, you might offer to pay it off at a rate of $50 per month or give them a lump sum of $350 if they write off the rest.

If your debt has gone to a collection agency, it is important to know they are paid on commission. So they are very open to getting a lump sum quickly and write off the rest rather than small monthly payments.

Once your debts are being paid up to date, you can rebuild your credit by going to a bank and asking for a $1000 loan to buy a $1,000 term deposit from them that will be paid off after one year. This gives you a positive report on your credit bureau and at the end of the year you have a $1,000 term deposit plus interest. Then you can use the $1,000 term deposit as collateral to get a $500 credit card, improving your credit rating further.

 

[Luckyflux]

OK pay the bills, I get that. How do I know which companies I owe money to? I looked at the credit report I received but I cannot decipher it? I don't know who the companies are or what numbers to call. Is there a trick to reading the credit reports?

How do I find out who I owe the money to?

 

[Lindley]

Usually there are these things called bills.

 

[RoJoHen]

OK pay the bills, I get that. How do I know which companies I owe money to? I looked at the credit report I received but I cannot decipher it? I don't know who the companies are or what numbers to call. Is there a trick to reading the credit reports?

How do I find out who I owe the money to?

You don't know where your debt came from? Do you not get bills? You shouldn't need a credit report to figure that out. Credit cards, student loans, auto loans, etc.

 

[Holdfast]

How do I find out who I owe the money to?

The modern consumer, ladies & gentlemen.

I mean, seriously, how does it get to this stage?!

Unless you're an investment bank with significant exposure to CDOs, you really shouldn't need to be asking this question!