408 credit score; 28 years old;terrible credit, finally trying to fix things

[Anonymous]

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@Anonymous wrote:
Thanks! I’m waiting for the statement from capital one to post to the credit bureaus. I finally paid it down to $0!!! And my Citi is sitting at a $25 balance. I feel like once my credit utilization drops from 95% back down to 1-10%, that’ll help my score jump some more too! Also, I set up payment arrangement with three of those collections accounts to be fully paid off on September 20(next payday!) I’m amazed!

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I just want to tell you that I'm very proud of you. I was where you were not too long ago. My score was in the low 400s. I remember when my score crossed 500 for the first time, I felt like crying I was so happy. When collection accounts started aging off my report (or in some cases reporting as paid) it was such a weight off my shoulders that I hadn't even realized was there.

I also had a family member use my credit. They opened (and overdrew) bank accounts in my name. For seven years I couldn't open a bank account because I was pressured into not pressing charges by my family. There are some big banks in this country that will never issue me credit because of what this family member did. I love my family, but I'll never trust any of them the same way again. We cannot choose our family, and sometimes they do terrible things to us. Learn your lesson and don't repeat the mistakes of the past. You can still love them and protect your financial health.

And now I want to talk about your student loans. You have $11k and no degree. Until last fall I had $90k and no degree. I took out $40k over 10 years of very very part time attendance and stopped just shy of graduating because life got the better of me. I was 14 credits shy of checking that "college graduate" box. I finally finished by taking elective credits via StraighterLine and transferring them back to my college. I deferred payments for 10+ years through "in school" and hardship as well as just being too broke to make payments so my payment amount was $0. When I finally got around to looking at my balance I was floored to see it had more than doubled. I tell you this for two reasons: 1. don't beat yourself up about having student loans without a degree. A lot of people have been there and if you want it, a degree is not out of the picture for you and 2. once you're in a position to do so, pay your student loans. Don't make the mistake I did (and definitely don't default - if you can't pay, call them!).

Keep up the work you're doing great. 

[Anonymous]

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@Anonymous wrote:
Update! My score has increased tremendously. Still no update from capital One. But my student loans(navient) has finally been reported as current! My score is now 555. Still poor, but better than 408!

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That is a great improvement in your score!  You should see even more improvement once those collections are paid off and that low UTI starts to report!  Excellent progress!

[Anonymous]

Hi! Sorry for not replying earlier. There were so many of you guys responding and giving such awesome advice! I have all of my bills and expenses written down on a chart just like this one, and it’s helped me a lot, and makes me think twice about spending money on extra stuff I don’t need. Thank you!

[Anonymous]

Noted! After seeing your comment, I immediately called TRowePrice and had them lower it to 1% for right now.

[Anonymous]

Thank you! It has taken a lot in me to five up the resentment towards them. If I keep living my life saying “I’m living like this because ‘so and so’ ruined my credit,” it never gets me anywhere. I know now that I cannot trust anyone but myself with my own finances. Because I’m paying a huge price for it. I had to learn that I cannot continue with my life if I still keep playing the victim, because it’s kept me down mentally and makes me feel like I’m a loser or a permanent underdog. I hope I never stoop this low again

[Anonymous]

I have learned the hard way never to put my credit in the hands of family members, especially mine, who all have a history of bad credit and bad money decisions. The cousin that stole my cards for gas actually passed away two years ago. Although I still can’t believe he’s gone at such a young age and I do miss him..he has caused me a great deal of pain that I’m still paying the price for. And the one that ruined my rental history, is pillar to post constantly. But I am dealing with the terrible terrible and reckless mistakes I made in my early twenties. I used to have scores in the lower 700s and upper 600s before all of this. Seeing a 408 score really had a great deal on my mental health and I have also been losing a lot of sleep, because I’m up all night till morning, obsessing over forums and Dave Ramsey videos on credit and being better with money.
As for the 555 score, you have no idea how happy I was when I saw the email notification about my credit score update! I checked it while I was on break and work, and when I saw how much had increased, I literally ran and skipped all over the place!

[Anonymous]

Congratulations! You're making great progress! I will point out though, for you and for future readers, your wages can't be garnished in Texas for most debt (exceptions are child support, taxes, student loans). I don't say that to imply you shouldn't pay them. You are making great progress and should continue. I just want to make sure you understood that. (You could still get a judgment against you, of course, if you were sued for not paying. They just can't garnish your wages.)

[Anonymous]

@scifidog, check your messages when you get a chance.

[Anonymous]

Really? This is a relief. So, although the apartment is from Florida, they still won’t be able to garnish wages since I live in Texas now? Gosh I hope this is true

[Anonymous]

There is an exception under the "full faith and credit" clause, but I won't get into all that legal mumbo jumbo here. I would definitely still pay them, but don't lose sleep over your wages being garnished. You're headed in the right direction.