Bankruptcy Question?

[Anonymous]

I have a horrible credit score of 545. I also have over $70,000 in student loan debt and bad payment history even after my bankruptcy.

However, my bankruptcy is set to come off my record next August (that marks 10 years). Will I see a huge increase in my credit score and what can I do get that number going up? I would be so happy and proud to see a 650 credit score! Please help with any advice! =(

[Anonymous]

More details are needed. What are your current credit cards and any other current loan information?

[Anonymous]

Most of my debt is in collections. I have one good working credit card that I use monthly and pay off now. Most of my student loans are on a Income based repayment plan at $0.00/mth and I am paying two other small student loans on time monthly now. However, most of my debt is now sitting in collections. I have 12 negative accounts on my credit report and my ratio to revolving balances on my credit limits is 91%. Not sure what that means...I am pretty sure this is bad!

[aussiesareforever]

Sounds kinda bad. However, there is still hope.

I think you will get a little boost when your BK comes off but your negative accounts are also significantly contributing to your low credit scores. Here are my recommendations

1. Pay down your revolving balance down as quickly as you can. The usual  recommendation is to only owe less than 9% of your available credit. You can work towards that goal slowly. Put in every additional $$ (even if it is $10 a month) towards the card and save yourself additional interest. Bringing your utilization down will help your score a lot

2. Opt out here

3. Do you know what the SOL of the debts you owe are? Your state's SOL can be found here. If you are past the SOL, start negotiating "pay for delete" settlements with the collection companies. You pay what you owe (or part of what you owe) and they delete the account information from your credit reports. You need to make sure that you are past your SOL, otherwise they may decide to sue you. All pay for delete (PFD) negotiations MUST be done in writing.

4. Do not ignore your debts and actively try to repair your credit. The reason I filed BK was because I had a ton of unsecured debt and I chose to ignore them. I thought they would just go away on their own. I was wrong. I waited until I was sued and garnished before I was forced to file BK. I wish I knew about this site then cause I would have tried to negotiate with my creditors. With your BK falling off, you can make significant progress in repairing your credit. It is not too late. Spend a lot of time reading these boards- especially the "Rebuilding your credit" section. There are a lot of useful information.

Good luck on your credit repair journey.

EDITED TO ADD: From this point forward, follow the mantra "I will NEVER, EVER, EVER, EVER, EVER be late. I will ALWAYS pay my bill on time" Even if you only pay the minimum payment. Pay your bills on time. Every time. One of my favorite posts can be found here. A single late does a lot of damage

[SoulMaster]

+1 to everything Aussie said and adding.

Buy "Total Money Makeover" by Dave Ramsey.  $10 bucks.  Read it, read it again, then live it.

-SM

[Anonymous]

Thank you so much. This has been very helpful Aussie!!