400 Credit Score (DON'T LAUGH!)

[LIGHTNIN]

Hi again jadams,

I moved this thread to rebuilding, hope you dont mind.

When looking for a secured card, look for one the doesnt charge a ton of fees. 

[BrokaToe]

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@jadams wrote:

Is it possible to get a secured credit card with a 400 credit score?

I have a lot of credit issues, obviously. I'm new to anything credit. I don't think it's as bad as it seems. I tried to get a Lowe's credit card and was declined. They sent me a letter saying my credit score is 400. I got a free credit report. I had about 14 negative accounts, 0 good accounts. I got 6 of them removed through transunion (will work on the other 2 bureaus soon). At least I think they are removed. Some were tax liens that I had paid and they said they were NOT paid. So transunion wrote me back and said they deleted 3 and updated 3 of my 6 disputes. Honestly it feels like my head is going to explode from all this new info I'm taking in. I'm working hard on fixing my credit.

My biggest problem right now is a $7,000 student loan that I've been paying off and on for the last 5 years (It's now $8,000 with interest and $1,500 collection agency fees). The first student loan is actually 2 accounts (subsidized and ubsubsidized) that I paid and didn't pay. Then there's a tradeline to another company which i paid and then didn't pay. and then again, there's another trade line that I don't think I paid on at all. So a total of 6 accounts all stemmed from that one loan that I didn't pay on. I don't know what to do about this or how get in good standing. I admittedly made some mistakes these last few years but now i'm here, i'm learning, and i'm trying to right my wrongs. I just don't know the steps to take. I think the student loan might even be at another collection agency now (PIONEER).

There's also a cable bill that I didn't pay from 2006. It's gone now but I think there's 2 more tradelines. One collection agency from 2010 and another  from 2011. Can they do that? It doesn't really seem fair to have all these tradelines.

These tradelines are really hurting me. I was laid off and unemployed for a year and a half. I'm just now starting another job. I tried to get a deferrment a year and a half ago on the student loans when i was first laid off and they said no since I was already deliquent on not paying. I'm starting a new job and ready to pay the loan off. I wanted to go back to school next semester but just found out the state won't give me any more money because of my deliquency on paying my loans... and I obviously can't get any more student loans either so now going back to school isn't going to happen for a while.

There's the back history on how someone can get a 400 credit score. I'm ready to start paying my debt and building my credit so hopefully in 3 years I can buy a house. I really need to finish my schooling and get a better degree in the next 3 years also.

I'll probably be posting shortly in the rebuilding credit forum, too.

So my question is, will anyone give me a secured card with a 400 credit score?

Thank you!

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Hi jadams, welcome to the forum!

You definitely came to the right place to find solid advice on how you should proceed. I just wanted to add one small thing to what the others have said so far.

When rebuilding the inquiries you acquire while applying for credit aren't quite as big of a deal as they are after your profile is established. BUT.....

Just be careful not to go crazy applying for things in "hopes" of getting approved, pick your applications wisely, because those inquiries will stay on your report for 2 years, even though they're only calculated into your score for the first year.

The reason I say this is because a LOT can imporve with your financial profile in a 2 year period depending on how you handle the situation. I've seen people go from where you're at to a 650+ FICO in less than a years time. So keep positive and we're all here to support each other and help along the way.

Wish you the Best!

[Shogun]

     How about a good laugh?   Well personally, I was in your shoes.  I know how it is.  It's going to take some hard work but you can pull yourself up.  Coming here was the first step.  Now get to work and it won't be long before you're here helping others.  

[SLbaddie]

As far as the student loans go, call Pioneer and arrange to enter rehabilitation. I've dealt with them before and they weren't my favorite, but for the most part dealing with student loan collectors isn't that bad. Do keep in mind that they might pressure you to pay more than you can. Argue with them on this, they have more leeway with what you pay than they might first say. They can arrange payments with you as low as 1% of the current loan amount (including costs, interest, etc) without you having to demonstrate financial hardship. If you need a lower monthly payment then that you can request one by filling out financial disclosure forms. Once you finish rehab in approxately 10 months, you can then defer or IBR. They will mark their trade line as positive and then you can GW the other associated negatives.

[starry1]

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@jadams wrote:

^ I can't blame you for laughing. My family laughed at me, too.

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Not laughing, I'm actually kind of excited to see how much you can improve in say 12 months. I'm betting at least 150 points. My advice would be to take it one account at a time. I agree rehabbing you student loans should be first on your list. After that's all set up, tackle that cable bill. You shouldn't have two agencies reporting the same debt. A simple dv to both should fix that. Then come back and ask for your next steps.

[jadams]

Thank you all. I'm taking all of your advice. I hope to update you soon when my score jumps. I'm actually enjoying rebuilding my credit. It's become a challene while before it was so daunting I ignored it all of these years.  I'm going to be added as authorized user on a credit card, rehab my student loans next month, dispute things through the other 2 bureaus... etc, etc. Eventually after I rehab my loan I'd like to apply for a secured card. I APPRECIATE YOU GUYS! Thanks again!

[BrokaToe]

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@jadams wrote:

Thank you all. I'm taking all of your advice. I hope to update you soon when my score jumps. I'm actually enjoying rebuilding my credit. It's become a challene while before it was so daunting I ignored it all of these years.  I'm going to be added as authorized user on a credit card, rehab my student loans next month, dispute things through the other 2 bureaus... etc, etc. Eventually after I rehab my loan I'd like to apply for a secured card. I APPRECIATE YOU GUYS! Thanks again!

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That is an excellent plan!!!  Keep on track and follow the steps you've laid out and you'll be in credit bliss before you know it. It takes a little time, but the short amount of time it does take is nothing compared to the rewards you will receive in the end!!!

[09Lexie]

Keep us posted. I wish you well!

[bahbahd]

For the federal student loans, I have always had deferment or forbearance retroactively applied if I was a month, two or three behind and needed to postpone repayment.  I am not sure why you did not qualify for deferment unless you had already defaulted. It sounds really fishy that they would not help you with your repayment schedule. I would contact your guarantor and possibly the ombudsman.

I believe your only option now will be to rehabilitate those student loans, which you should do. Eventually after at least 9 consecutive monthly payments they will be sold back to a new lender, assigned to a new loan servicing agency and you will once again have normal student loans. I'd keep the guarantor and ombudsman in the loop cuz you might get help from them when you try to have the old accounts deleted since your first loan servicing agent did not do you any favors by refusing to help you exercise repayment options that were available to you.

I personally skipped getting the credit (re)building cards and secured cards that most people here advocate. I did not want a first primer card with a low limit for to give BoA $5k for a secured card with a good limit. Before trying to establish new credit, I worked on paying off and removing most of the derogatory accounts on my credit report. A few medical collections, a few other things here and there.  I used my relationship with my bank to get my first active CC in a long time.

Point is, I would work on cleaning up what is on your reports by squaring up with as many old accounts as possible and having as much derogatory listing removed that you can. Then work on getting new credit cards.  Some may not agree, but I think cleaning a few months first then getting great cards through your bank, credit union, capitol one, etc is a much more rewarding and fruitful path than instantly trying to reestablish with high interest predatory credit cards or secured cards that tie up funds better used in paying off old debts.

[stillworking]

No laughing here.  You are taking the most important step and that is starting to repair.  We have all had some issues or another.  No one starts with a perfect score it takes work, time and patience.  I would clean up the old debt and try to get some PFD's (paid for deletion); they go a long way in helping boost your score.  I have student loans that were tanking my score, since my  debt to credit ratio was at 76%.  It is 70% now, 5408(owed)/7714(limit)=70%. Find out your loans interest per month and pay a few extra dollars on it when you can.