topic Credit so bad, it can't be fixed...or can it...? in Rebuilding Your Credit

Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 03:27:41 GMT

Hello, everyone. Let me give you a rundown on my terrible, short life. I am a 25 year old female. I have not finished college. I am originally from South Florida, but moved to Arlington, TX to be with someone (who i am no longer with); but I still live here because I now have nowhere else to go. When I first started my credit history at the age of 17, I already did not have an easy start:

1.) In 2009, I applied for my first secured credit card through Bank of America. The limit was $500. I was off to a rough start already. I was working a $7 hour retail job at the time and was using the credit as spending money. so, i would max the card out, pay the balance off in full when i get paid(after i used my whole paycheck to pay the card off, i was always left with no more money and ended up using the card again and maxing it out), this was a cycle that went on for two years.

2.) in 2012, I got a new job that was paying $11 an hour. This was the year that I actually took my credit seriously because i was in desperate "need" of a shiny new/preowned car. when i started working, i worked tirelessly with my Bank of America card to make sure it was going to help me build credit. Fast forward to september of 2012, my credit score was a 672. Bank of America graduated my card from secured to unsecured and upped my credit limit to $700. With this, i was able to finance 4 year old car with 2500 down and 26% interest(I know, stupid, but i wanted a new car at the time. I ended up refinancing it later on)

3.) in 2013, after i got my "new" car, i got credit hungry. I felt like i was untouchable. i started putting in ALL kinds of inquiries to see what i would get approved for. and i pretty much got approved for everything i applied for. with the new car on my credit, my score was at a 750 at the time. I applied for gas cards, target card, AMEX(which i always got denied for), and many others. i ended up having Exxon mobil with a $500 limit, Chevron $300 limit, Target $200, Dell Financial $1000 limit, my car $15000 at the time, and Bank of America $700

4.) in 2014, i defaulted on the Exxon mobil card because a relative that i was living with at the time went in my dresser and used my Exxon gas card and made up to $300 worth of gasoline purchases. He still denies it to this day. my whole family denies it to this day. I called Exxon to see if i can get the charges disputed, but they refused to help since i told them it was stolen from a family member. I was going through a tough time at that time, and i told them i refuse to pay. so it defaulted and it's on my credit. I also got an iphone at the time through Sprint. Worst mistake i could have ever made. the bill was too expensive for me. every month, i was paying a MINIMUM of $150..$150!!! I couldn't afford them so i cancelled the phone service and went with my mom on her family plan with Metro. Since it was a sprint phone, it was useless, and i couldn't reuse it. Sprint has me in collections for $850. I also defaulted on the Bank of America card as well, because i got so depressed and didn't care about my credit at all. I owed them $675. I also got internet wifi service from Comcast during this year when i was living with a family friend. this person no longer wanted me to live at their house anymore, so i had to move at an old high school classmates home for the time being, and i had to cancel my Comcast service. I owe them $150 for the router i never got the chance to return. Later this year, I was fired from my job, and was struggling to pay rent. Bills kept piling up because i had rent and a car note. My cousins convinced me to let them lease an apartment in my name since they had evictions on their records. they needed somewhere to stay. Although i told them i was happy with where i was living at the time (with my old high school classmate. her mom loves me)...they convinced me that a glorious new apartment is where it's at! At the end of the day, all they wanted was someone naive like me with no rental history to sign my name on the lease agreement...I moved in...decided to move to Texas because i kept losing jobs and i really missed my bf that moved away from FL to TX at the time. My cousins told me they would take care of the monthly rent. I was trying tirelessly to get my name taken off of the lease, but it was impossible, so i gave up.

5.) in june 2015, my lease ended at the apartment complex that i signed for my cousins. they were supposed to move out by june, but stayed an extra month. they did not pay that extra months rent, and they left the apartment a mess. the complex called and said i owe them $1600. At that time(and now), i CANNOT afford it. i cried and cried, and begged my cousin to get on a payment plan and he always said "yeah sure" but never followed through. during this year, i also opened a credit card through capital one with a $300 limit. I defaulted on electricity companies while being out here, i also finally defaulted on my Target card. I owe Target $274.

6.) in 2016, i am living in a room share, because i don't have good credit to get an apartment in a safe area. the $1600 unpaid rent from my cousin got promoted to collections, which they call me every single day. I've called him millions of times and texted him he eventually blocked me. since i'm stuck in texas, there's no way to force him to do anything. i have no money to pay for it. my only active credit card that's [barely] defaulted is the capital one card. and i've fallen behind on that for a greater part of this entire year. the balance right now is $156

Total Debt:

Car: currently $3,900 payoff balance

Cap One: $156 Current

Exxon: $680 in collections

Target: $274 in collections

TXU energy: 210 in collections

Just Energy: $180 in collections

Apartment rented for cousin: $1600

Sprint: $850 in collections

Bank of America: $650 charged of/paid off in settlement to--->$0

Student loans: $13,000? give or take

I am 25. and has so far had a very rough start...

PLEASE help. :'-(

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 03:47:28 GMT

First, take a deep breath. You're SUPER young, and i was about your age when i massacred my credit - but to the tune of TENS OF THOUSANDS of dollars in default, almost $100k. I stopped caring, was depressed, etc etc -- long story, but in 2007 it really took a nosedive for me when i was in nursing school. Defaulted on loans, CCs, and almsot my car. Scores were ranging 500-530 max and I could get NO CREDIT for years. Best thing that ever happened to me. Today my scores are 680-700, and only sink from time to time if i over use my credit (which is fixed easily by paying down).

You will recover from this - your debt isnt that bad. My advice is to see what accounts you can settle with collectors, depending on AGE of these debts - it seems most are fairly recent so they wont be aging off anytime soon. 7 Years and they're off your report, paid or not. Settle what you can, for pennies on the dollar (ie you may be able to settle a $600 default for under $300) then follow up with the original creditors with GOOD WILL LETTERS -- basically expalining why you defaulted, and asking for forgivenness of the default and to remove the tradeline from your report after it is paid. Now, you have a MUCH better chnace of this if you pay in full -- settling is going to be tough. But if you cant afford to PIF, you do what you can do.

Another thing you can do is look into a credit counseling agency -- not sure how they work with collections though. Lastly, if all else fails, you can look into legal help -- bankruptcy is a long lasting choice and you are so young, so its a double edged sword. You dont want to file BR at 25, yet if you had to, by 33-35 youd have a completely clean slate, and thats still darn young! However, your debt load isnt terrible. Are oyu defaulted on student loans too? If so, you can get those rehabbed if they are federal.

Deep breath, zoom! At the end of the day its only credit -- important, no doubt -- life or death at your age? Not quite. You can fix this. I've seen people claw out of debts and defaults into the 200-300k range. You can fix this :-)

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 04:50:04 GMT

First off...I'm sorry about your situation. Many of your issues, however could of been avoided by listening to your gut. But that's over and done. Chalk it up to a learning experience.

Second, looking at your listed debts, they don't seem abundant. However, if you are making $11 per hour and with your current expenses, they are significant. You will have to deal with this on your credit report for some time. You have a couple of choices because these are your debts:

1. Pay them. Make some type of payment arrangements but they will stay on your report unless you can get a PFD. You could easily knock it out with picking up a pt job. Regardless of what you choose, I do think you should pay the charged off utilities. You will need them once you are back on your feet.

2. Ignore them and hope they don't come after you. They will stay on your report.

3. File ch7. Clean slate but will stay on your credit report. (Really think about this before you decide to do this).

It's not the end of the world. You are still young and can rebound from this.

*This may need to be in a different forum........I'm sure a mod will move if needed.

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 04:09:27 GMT

Hi there. Thank you both for your replies. I am very new to forums. So I am not sure if or why I am in the wrong place. I currently work at Costco at 13.50 an hour and time and a half on Sundays with great benefits. However, it's still not enough. I get paid every two weeks and it only takes care of the current bills(car payment, insurance, phone, and rent). I was thinking of filling bankruptcy..but a little nervous because I'm not sure if it's going to shoot me down even more. I am hoping that once I pay my car balance off, I can be able to determine what I can pay off. I will let you know during that time.

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 04:11:18 GMT

Thank you for your response. I sincerely appreciate you both taking the time out to help me!

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 04:16:54 GMT

@Anonymous wrote:
Hi there. Thank you both for your replies. I am very new to forums. So I am not sure if or why I am in the wrong place. I currently work at Costco at 13.50 an hour and time and a half on Sundays with great benefits. However, it's still not enough. I get paid every two weeks and it only takes care of the current bills(car payment, insurance, phone, and rent).

No worries, I was just thinking you'd get more input in the rebuilding forum ☺️

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 04:22:01 GMT

May I ask how do you edit the tags?

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 04:26:55 GMT

Read the whole thing.. wow.. sorry op. Glad you're at least working.

Re: Credit so bad, it can't be fixed...or can it...?

Revelate — Mon, 17 Oct 2016 04:36:55 GMT

@Anonymous wrote:
Hi there. Thank you both for your replies. I am very new to forums. So I am not sure if or why I am in the wrong place. I currently work at Costco at 13.50 an hour and time and a half on Sundays with great benefits. However, it's still not enough. I get paid every two weeks and it only takes care of the current bills(car payment, insurance, phone, and rent). I was thinking of filling bankruptcy..but a little nervous because I'm not sure if it's going to shoot me down even more. I am hoping that once I pay my car balance off, I can be able to determine what I can pay off. I will let you know during that time.

Welcome to the forums!

What I would also suggest in addition to the advice above is to do a budgetting exercise: you're making on the order of 25K-30K per year depending how the hours break down, and your benefits are paid, you can solve it though it'll take time.

Figure out exactly where your cash is going; maybe see if there's a place closer to work you can move and simply sell the car for example and get a bike (or walk) or take mass transit; not every place mandates a credit check. See what the poverty line is for your neck of the woods and then if your student loans are of the Federal variety and you're under 150% of the poverty income (you might be depending where you are living) see about getting the student loans put into forebearance for economic hardship.

BK may be an option (though it costs money to file), and it wouldn't discharge the student loan debts anyway. There's some pretty standard worksheets which look suspiciously like the budgetting exercise you should do anyway to determine whether a 7 is even an option for you though honestly with your income and benefits vs. debts it wouldn't be my first choice if I were in your shoes.

End of the day, even having the desire to fix it, means you'll be OK: first step towards any resolution is defining the problem, and you've already taken that.

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 04:38:33 GMT

Take a deep breath, Brittany. In.........out.........feel better?

You are far from unfixable.

Bit of personal history: I was 20 when I got married (way too young, but love is blind and all that). We were both in the Navy, and Navy policy is when two members are married, one is on a ship and one on shore. Long story short, I was gone on a 9 month deployment and got the Dear John I want a divorce letter.

At the time she was paying our bills, as I was gone, and I was simply direct depositing money to pay my portion into her account. It was almost impossible to change that from the ship so I trusted her that she was paying my bills (big mistake). I got home, signed the papers, accepted at face value her assurances that all the bills were paid (young AND dumb). I seperated from the Navy soon after that and moved across country from California to Maryland.

I got a job and after a few months of making solid paychecks, decided I might want to get a car (I was 23 and living at home with the parents). I checked my credit score and about had a heart attack - scores were in the 500s, every single credit card or loan I had previously was in default and charged off. I had about 20k in bad debt: I seriously thought about bankruptcy.

However, with some thought, I called all of my creditors and explained the situation: I worked out a payoff agreement for all of them, and I lived frugally for the next 3 years to pay it all off. No new car, no shiny toys......I accepted it as my penance for being so incredibly stupid. Did it suck? You bet. Did I want to give up and quit? Yep. But somehow I stuck it out and paid everything off.

All of that bad debt was on my credit report until I was 30, and I bought a house for 245k at 31 with a fresh, clean credit report. I could have done it earlier......more life lessons.

The point of all this is that you will be fine. Yes, it will take hard work and sacrifice. Yes, your pride will take a blow. Yes, your life will be harder than it should be. All of this should be embraced as a life lesson that you should not forget. Learn these lessons NOW. When you are 33, you will have a clean report (and it will come much quicker than you think, blink of an eye) and the knowledge to use and maintain it. Another lesson I think you have learned: don't trust anyone with your financial well being or reputation/credit, even (or especially) family. Family will screw you over quicker than a stranger.

Chin up - you have found a great resource here and before long you will be back on track. Just don't give up.

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 06:00:38 GMT

Your post brought me to tears because it's quite similar to my story. You give me hope that there's more opportunities out there other than bankruptcy. I will keep you updated on my journey. Than you so much! I truly and sincerely appreciate you reading my forum and sharing your experience. Feels like a weight has been lifted

Re: Credit so bad, it can't be fixed...or can it...?

grillandwinemaster — Mon, 17 Oct 2016 06:23:23 GMT

Hey Brittany, hang in There. Your not bankrupt. Not sure how many hours you work, but at face value it seems like you make enough to claw your way out of this.

First and foremost, make a budget so you can keep track of your money. Check out Z Dave Ramsey or a similar program. It will help you claw your way out of your current situation.

Best credit wishes!

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 13:51:20 GMT

And remember, it will take time. That is the main thing to remember. Credit can be fixed, it's just a 7yr snap shot. Doing it right for 4 years moves all the bad to back and things really start to look good.

Re: Credit so bad, it can't be fixed...or can it...?

jbb27885 — Mon, 17 Oct 2016 14:49:41 GMT

Keep your head up Brittany. I'm only 28 and have found myself in a situation similar to yours twice so far in my life. Finally I have said enough is enough and I am working to rebuild and maintain my credit score. The older I'm getting the more I'm realizing that materially speaking less is more. I'd rather have fat pockets and good credit that a bunch of worthless "things". You will recover from this just as I have!

Re: Credit so bad, it can't be fixed...or can it...?

Dalmus — Mon, 17 Oct 2016 14:58:11 GMT

And, take another deep breath. Keep taking them. Your credit life isn't over. It just needs to be managed and nursed back to health.

What's really terrible is that more than half of what you have in collectons is due to the activities of *family*. I'd say small claims court to get the money from your cousin regarding the lease issue, but A) I don't know that he has money, and B) you need to decide if that would be worth the family drama it would create. Personally, if they were my cousins, I'd be tempted to speak to their parents, or have MY parents speak to their parents. Might lead to more drama, but maybe some family shaming would get them to cough up the money. Plus, if they used you that way, even if they are mad at you and don't want anythign to do with you after you make it a Family issue, it doesn't appear to be a relationship worth salvaging.

I may have missed it, but are you working full time at $13.50? If you aren't working full time, then you should search out a part time job somewhere else. Even if you've only earning minimum wage at the second job, its extra money to give you some relief.

You owe $3,900 on the car... how much is it worth? Perhaps you can sell it and downsize into a smaller "beater" until you get back on your feet. It'll suck, BUT, you could save a car payment AND you can reduce your insurance significantly

If you don't mind sharing ALL of your monthly expenses (Rent, current phone bill, car payment, fuel, insurance, groceries, etc) and your monthly take home pay, some of the financial wizards here would be able to suggest some potential plans. Ultimately, you have to do what's best for you, but its nice to get different opinions.

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 15:15:27 GMT

I have tried talking to family. Every single one of them gives me the run around. The mother of my cousin (my aunt) is not a very nice person at all. She is actually the one that is encouraging him not to pay the money he rightfully needs to pay. As far as work, I only work 32 hours a week at Costco. On Sundays we get paid time and a half. So that's around 19-20 an hour on Sundays. So every two weeks, I'm taking home 650-700. My room share is $450 a month. My car payment is $315 a month. Insurance is $145 a month, since I am required to have full coverage. My capital one card is a minimum of $25 a month. And phone bill is $55 per month. Not to mention gas($20 every two weeks) and groceries(never more than $100). My car is a 2006 Honda Civic with currently 117k miles on it.

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Mon, 17 Oct 2016 15:24:08 GMT

My Transunion score is currently 464

Re: Credit so bad, it can't be fixed...or can it...?

jbb27885 — Mon, 17 Oct 2016 15:41:08 GMT

How much longer do you have on your car payment? Can you ask for more hours at work? Are you eligible for a promotion or could you get a part time second job for a little while?

Re: Credit so bad, it can't be fixed...or can it...?

grillandwinemaster — Thu, 20 Oct 2016 22:21:12 GMT

I've heard driving for uber is a great way to make fast, decent extra money.

Granted, I've only "heard" this. I haven't done it.

Best credit wishes to you.

Re: Credit so bad, it can't be fixed...or can it...?

Anonymous — Fri, 21 Oct 2016 00:30:18 GMT

Ok, Brit
Im old enough to be your Pops but can tell you for SURE
1) This will pass and be looked back on, as a 'wow, remember when ' in NO Time
2) You are NOWHERE near the 1st nor last person to swim this lap, sweetie you WILL BE FINE

And I'm not just blowing smoke, base upon your concern and desire to get it right shows you're ready and have the will and moral compass to do better and BE BETTER than your cousin and your Aunt.

Next, let's LOOK at your 'debt' ...yes it seems overwhelming because for you at your income and current space those dollars figures seem CRAZY high but in truthfulness

Your overall debt (minus the non Bk-able anyway student loans) are NOWHERE near what a reasonable non-crook (just looking for fees) would advise even considering a Bk...pleeeeeeease!

Most of the stuff listed are in the 100's of dollars range, it is a blessing there aren't more zeros behind your 'mess' like the Navy vet wrote of in this thread (great job, btw from an old Jarhead)

The sting of these items as NEW start to fade as they age, so the thought of whacking your credit for 7 years is outrageous when one considers you can payoff some of this crap now and as others age the offers to settle and pay less for delete will SURELY come prior to taking a 7 year over the dollar amounts listed.

As, I mentioned I highly doubt a component federal judge would even be comfortable signing off on an actual BK for such small, in the scheme of things amount of debt because it's too huge a step, you gotta hold that bullet I'm the chamber for a bigger deal sweetheart...trust me.

The car, which your driving is by far your biggest current debt and yes it's too high for you right now cause with the insurance it's too much of your income and in your current state a refi ain't gonna happen

But the good news is that car note has a PAYOFF date, sweetheart it won't be forever and you've got a Honda that you can drive to the wheels fall off.

You instantly have 100s of dollars a month once that car is paid (and that's extra money down the line AFTER, we take some today actions, I'll mention later)
That should be encouraging, it's built in with that car note out of the way you could easily knock off those small bumps in the road, other than the $1600 for the apartment complex (which some DC will negotiate)

Again head up, and be thankful the so N so cousin only left you with that much vs a full on eviction in your name thank goodness for small wonders😃

Randomly
Have you looked into the barest bone cheapest insurance you can get away with for your 10 y.o. car
As an agent I know you must maintain full coverage due to it being financed but it doesn't have to be a well known higher priced carrier, remember if anything happens their gonna total that old car on you anyway, so CHEAP is your best option right now.

Have you run a new quote since reaching the age of 25 are you near 26 (it can make a decent difference) even $50 bucks brings you $600 new dollars outta nowhere.

Also, we have to see life like our forefathers who CREATED work for themselves being locksmiths, blacksmiths, tailors, pie sellers... whatever

Point being your a young person with a reliable gas friendly car, with only 32 non touchable hours

Someone mentioned Uber... Don't know about that but I do know you can run errands for Seniors, as in grocery shopping bank and dr.appt runs dog walks vet visits etc....there are ways to Create some cash flow

No way you can't make a few 100 extra bucks every month again who've got YOUTH and a cheap on gas small reliable car and TIME on your side...

Did I mention baby sitting, house sitting, house cleaning, tutoring kids, helping a English as second language person...hey you're smarter than the 4th grader right and know English, you speak it, correct (You're in TX for Pete/Pedro sake)

All I'm saying is you've got a cell phone (or get a Google voice and roll it over for privacy) a car, time and desire...all you need now is Kinko's to make some flyers to pass out put up, visit some churches, senior communities etc and you will get clients (tougher for a 25 y.o. male but a young lady.. piece if cake)

You could have those numbers leisurely knocked out by Santa's 2017 rum😃

Also once you get any money open a small CC account that can be aging as you are digging out, that way you'll also have a few aged positive accounts building depth as time burns the other end of the negatives affect weakening

24-36 months from now you'll be over the moon
I always tell ppl real adult life doesn't start till 26, so your at the beginning....well before 30 these non sense could just be one bad detour

Best of luck
If you need help or advice please PM me
but 10-15 hours a week worth of PAID service work
will have you dancing in the street in no time
Ans or get that car note to disappear

Think what just $300-$500 extra 'side hustle' bucks does to your life right now and get it done😃