Rebuilding credit with low income

[DrQuinn37]

Fico Score 8 553 and Experian advantage score 3.0 is 598 

Student loans: roughly $35,000 consolidated (forbearance) NelNet 

Credit cards: no active cards

Installment loans: none

Mortgage: none

Debts reported via Wallet Hub 

Credence collections: $6,974 AT&T Jan 26, 2025 

Jefferson Capital: $9250 Westlake Financial car loan (voluntary repo in 2019) 

Midland credit: $494 Web bank 2021 

The Bureaus: $313 Comenity bank 

Not listed on WalletHub; 

Capital One: $198 (Interest due on a closed account)

Cardless: Simon Mall Amex credit card 

Due date 03/03/2025

Minimum due $5324.37

Statement balance $5324.37

* They used Advantage Score 4.0 to approve me for a $5,000 credit limit in 2023. 

INCOME: 

$43,000 net 

Single, no children, no animals, rent is $400,  no vehicle loans, no utilities, cellphone plan is $75 a month Metro by T-Mobile with no cellphone payments. 

Will be going back to community college in March for my AS in Accounting (Online) with a goal of a Master's in Accounting working remotely! 

My goal is a 680 within a year if possible! AMEX credit stated that I should just wait it out without applying for credit cards/loans and my score should increase within the next 9 months but should I still get debts paid off? 

[Creditwiser]

I would tackle the small debts first. Cap 1 ,Midland, Comenity.  You didn't mention any charge offs and you would idealy want to avoid that. Since you don't have any obligations aside from the debt, focus on paying it down. Do what you need to do to avoid Charge Offs and you can obtain better scores in a relatively short amount of time.  Communicate with these creditiors. Do not ignore them. Once you have a handle on the debt, you can seek some secured CC's or maybe non secured via Credit union perhaps. Maybe a Credit Builder Loan for a good credit mix of revolving and installment credit. While you're at it, stash away some funds in an Emergency Savings account if you haven't already. Once you reach that point you can march forward with a successful rebuild. Welcome to the forum !

[FicoMike0]

With the dates you give, I think you'll be waiting a long time. You might wait out the car loan. I'd be worried they'd sue you for some of the larger debts. I'd defiantly try to settle with them. I also agree you need credit to build credit, maybe a secured card.

[Thomas_Thumb]

Stop accumulating debt.

Call and negotiate a settlement agreement on the Simons card and the Credence collections. Once these are resolved, get secured revolving CC account with a $500 CL. Never let more than $145 report as a statement balance and pay balance in full every month.

[DrQuinn37]

This is what American Express said should be my Goal. 

A higher target FICO® Score 8 of 648 could be met within 9 months with the following actions:

Pay all your bills on time for 9 months.

Consistently paying bills on time is a very important factor considered in a FICO® Score.

Stay current on your payments so that your most recent delinquency ages to 10 months.

Allow the age of your most recently opened account to increase to 1 year, 5 months.

Opening several new credit accounts in a short period of time indicates greater credit risk.

Allow for your average length of established history to age to 2 years, 11 months.

Opening a new account will negatively impact your length of credit history, so only open new credit sparingly.

Continue to make your monthly installment loan payments on time to reduce the total Installment loan balances of $24,048 you owe.

Your balance on an installment account decreases every time you make a payment, which can help your utilization rate and FICO Score.

Wait to apply for new credit.

A new credit application may result in a hard inquiry being posted on your credit report. Hard inquiries posted in the last 12 months may reduce a FICO Score and impact your goal timeline.

[Gardenbrownie3]

I am also rebuilding with low income. My advice would be to list your debts from lowest to highest. Pay off or settle the lowest amounts and start communicating with the higher balances. It's important to find out what your options are in terms of settlement or a payment arrangement that's affordable for you. You could potentially knockout those "small" balances and have extra funds towards that settlement or pa with the larger balances. 

I would also recommend researching secured cards or utilizing no credit score impact preapprovals from issuers that have products for rebuilding bad and/or fair credit. I agree you have to use credit to build credit so getting a card is necessary IMO. Keep in mind you are doing all of these things at the same time so stay organized. Invest in a notebook or a dry erase board to get track of all the knowledge you learn about your own credit profile and the 💎 dropped on this forum. 

Remember to treat your credit card like is your checking account and make a payment EVERYTIME you get paid and you'll WIN. Good luck! You can search this forum for anything!