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

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Regular Contributor

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

I agree.  Set up a budget.  You said you are pulling in roughly $750 every two weeks after taxes, medical insurance, 401K, etc is deducted.  So baically, you have take-home pay of about $1500/month.  The expenses listed above equal $773 minus food/toiletries/mis entertainment.  So $1500-$773 is $727 left over.  Lets say you spend $200 on food/toiletries and entertainment.  You should still have a surplus of $500 per month.  That is a decent surplus.  Funnel all of that into paying down balances.  You should also see when the DOFD is for all of the charge offs.  If they are close to falling off, like the Sprint bill, I would pay them last.  I would concentrate on newer charge offs first, and contact the collection companies as they may be willing to settle for smaller amounts. 

 

Also, a big thing with your budget is miscellaneous entertainment.  This is the category that should be cut first when in financial stress.  Do not eat out, no going to the movies, no vacations, etc.  For entertainment, do things that are FREE...go hiking, go biking if you own a bike, go to free festivals, etc in your community.  You don't have to pay alot for entertainment if you plan it correctly.  And in terms of food, good thing to buy in bulk (I am assuming you may even get a discount from Costso), but avoid name brand foods.  Buy off-brands because they will save you money, and like I said, no eating out.  Eating out, eats up your money.  

Message 11 of 45
Regular Contributor

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

Also, I think I would concetrate on paying off the rental property charge first.  If it is accruing interest, get it paid off ASAP.  Call whoever now owns this account and work out a payment plan.  Also, see it they would be willing to negotiate a smaller amount owed.  With this one, I would be worried they may try to take you to court and then garnish your wages.  With the other charge offs, they are all fairly small so I don't really see the companies trying to take you to court as they wouldn't get too much out of it.

Message 12 of 45
Regular Contributor

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

One more thing to add.

 

 Put the 401k on hold for a year or so. Or drop it to 2%

that extra $91 will help on paying down more in the short term 

 

 

July 31/2019. EX-712. EQ-704. TU-726
Aug 23/2019. EX-709 EQ-710 TU-731
Sept 9/2019. EX-707 EQ-714 TU-731
Message 13 of 45
Senior Contributor

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


@JBJBJB1 wrote:

Oh kiddo, I am so sorry! 

 

What concerns me most on your list of debts is the rental property as typically dirtbag lawfirms will buy those debts and get judgments against you, doubling or  tripling that debt.  In my state, they can then file the judgment with the courts and then renew them every 10 years so they never go away, and once they have a judgment they can garnish your wages.  I don't know what is is like in the state the apartment you rented in.

 

Honestly, your credit is so bad, you may want to go see a BK lawyer.  Consultations are usually free, so you should explore it as an option.  You may not make the means test, but if you do, it is worth a shot, clean slate (except for your student loans of course), if not, you can probably at least get some free information.   

 

Although a lot of your debts may be getting ready to fall off in the next year anyway.  

 

Also, with regards to your student loans, when you pay late or defer, the interest compounds.  For instance my husband owed 40k in 2000 when he graduated, because of late payments, deferrment, and eventually a default he owed $48,000 in 2016 - 16 YEARS LATER.   When paid off he will have paid at least twice his original balance.   Student loans are truly predatory, so start paying a soon as you can. 

 

The good news, is that with 408, you have nowhere to go but UPSmiley Happy.   

 

 

 


@JBJBJB1 We dont even know what the total debt is yet. Its a little premature to advise BK just yet.  They make $33,600 a year and that would pass probably any means test in any state.





My posts are JMHO. I DO NOT claim to be a FICO expert. Just sharing my experiences from rebuild to recovery after BK DC. My siggy is not to brag at all. Just to show fellow members what can be accomplished when you do it right and play the FICO Credit Game.
Message 14 of 45
Regular Contributor

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

Also, he has a surpus of approximately $500 each month.  I don't see them approving a bankruptcy when there is a decent monthly surplus than can be used to pay down balances.  Bankruptcy should be a last resort, not a first resort.

Message 15 of 45
Member

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

I am currently looking into how to add a second job into my schedule already with Costco. Costco is retail, so their schedule is never the same. Sometimes I work 28 hours a week, sometimes I work 38-39(they’ll never let you hit 40, if your job title is labeled as “part time,” I’d have to apply for a full time position to get guaranteed 40 hours a week) so that’s my trouble there. I think it’d be smarter if I try to push for a full time position, because my raises will come sooner. We get raises every 1100 hours we work, until you’re topped out at $26 an hour. I’m currently at 17.50, I’m due for a $2 raise in 215 more hours.

As for pay for deletion, I have called ERC and southwest credit systems(both of the time Warner internet accounts), since they are the most recent collections accounts, and both have said they do not offer pay for delete. I even called time Warner and asked if I paid directly through time Warner, if I can get a pay for delete and they said no as well.
I will keep trying but I think it’s not going to budge with the collections company.
My plan for the rest of this year:
-time Warner collections acct
-time Warner other collections acct
-just energy collections acct
-progressive collections acct
Because these are all the most recent ones.
Message 16 of 45
Member

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

My total debt including my current and open accounts, student loans and collections are: $17,336. Is that a lot? Please help
Message 17 of 45
Regular Contributor

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

 


@scifidog wrote:
My total debt including my current and open accounts, student loans and collections are: $17,336. Is that a lot? Please help

Yes, that is quite a bit.  A large chunk of that is your school loans which are deferred at the moment so that definitely helps.  I would concentrate on the apartment rental first.  Get that paid off as they might very well take you to court to get the money.  Then start working on the charge offs.  Like I said, your charge offs look to be relatively small amounts so they are unlikely to take you to court unlike the amount owed for the defaulted apartment.

 

And I would keep plugging with the goodwill letters.  Send them out on a consistent basis.  You just need one letter to be received by one person willing to do a PFD.  There are a couple companies who hardly ever do PFD (CapitalOne is one of them), but there are tons of success stories for PFD for other companies, but it is NOT a quick process.  It takes time and effort.

Message 18 of 45
Member

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

I really appreciate the advice! Especially from someone like me who is completely clueless to credit! Another question, if I pay all these collections off in settlements, will that hurt my score? I mean, it’s already pretty bad, but will it make it even worse?
I plan on tackling the rental property debt with my tax refund in February, since I file my taxes as soon as our w2s are available, and I file them by myself.
Also, my friend added me to his chase rewards card and his Costco Citi card. They didn’t ask for the ssn. They just asked for my name and birthday. How will they report this to my credit? And if it IS reported, how much of an impact would it have? Please give me advice, thank you so much
Message 19 of 45
Regular Contributor

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

I would still start paying on the apartment now.  You said the interest is racking up.  The more you pay, the less the interest would compound so you would save money by starting to pay on it now.  Finish paying on the apartment with your tax return, and then use any extra to start paying off charge offs/collections.  That also gives you time to send out goodwill letters for a while.  Hopefully, between now and then, you will have some takers for a PFD.  If one of these collectors come back with a PFD between now and tax return time, by all means go ahead and pay the money that month on that collection to get it off your report.  But otherwise, I would apply the money to the apartment.

 

Your friend adding you as an AU on his cards will help your overall utilization score as long as his utilization on his cards is low.  If he has high utilization, then it could actually hurt your score...not that it can hurt too much right now with a score of 408Smiley Wink  But once your score does go up and your utilization goes down, it could hurt your score if he does have high utilization.  Just keep an eye on that.  How much it could help you really depends on what his limits are on the cards and the balance the cards report each month.

 

Paying off the charge offs should help your credit score.  It is more detrimental to your score to have unpaid charge offs.

Message 20 of 45
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