@Anonymouswrote:
Hi guys im new here and have been reading tons of other post but I would like to see if I can get more direct advice. I just turned 22 years old and my credit is in the garbage ( fico=501). Here is how I ruined my credit. I got a credit card when I turned 18 and maxed it out. I was making minimum monthly payments but eventually defaulted and the account got closed and sent to collection. I was working at a dealership as a tech and needed tools. Financed about 3k worth of tools at a super high interest rate, I paid about $1500 off the balance then defaulted and got sent to collection. At the same time my student loans fell behind and at one point I was 195 days past due. Im not gonna make any excuses and know that I was really immature and irresponsible and its no ones fault but mine. I never really knew the consequences of having bad credit until now that im living through them. Ive been working hard for the past 6 months and have been able to kind of fix stuff. I paid in full my wells fargo credit account($1205 balance), I got current with my student loans and have been making timely payments since, and I reached a settlement with snapon tools which is also paid off. I think im ready to start rebuilding my credit, im just unsure what the best options are. Ive been making on time payments on everything and do not plan on falling behind. I have also saved up quite a bit of money just in case there is an emergency of some sort. I really want to get my credit score up, I need to finance a new car within the first half of 2019, which gives me about a little over a year to try and get my score up as much as possible so I can get atleast a decent apr. I am gonna be trading in my current car which im a little upside down on. But ive landed a job where I have a pretty good income so I do plan to put about 30-40% down payment. My current car is a sports car with no backseats, I need something where I can maybe put a baby seat later next year. Anyways thanks for everyones help!!
First of all, congrats on taking the journey! I was right there with you in 2013 - crap credit, student loans in the toilet, needing to get a car.
Just a couple questions for you:
-What derogs do you have on your reports?
-What CCs do you have open (if any) and what is your utilization on them?
in the garden until 2019!
@Anonymouswrote:
As of now nothing shows derogatory and I have no credit cards at all. The Wells Fargo one I talked about has been the one and only I have ever have.
Welcome to your clean slate!!! So, what I did was this:
-Got a secured card. At the time, I was a full time student, so I could only afford to tie up $500. I walked into my CU, explained my situation, and opened that card. After six months, they graduated me to an unsecured card with a $1,000 limit. I still have that card - it's my oldest one - never late, carries a 9% balance to report, and then gets paid off.
-I also used the shopping cart trick to get a store card. This isn't necessary...some people may say DON'T do this. I did mainly because I was also dealing with rehabbing defaulted student loans and also was starting an internship and needed grown-up clothes. I use this card and pay it off right away becuase the interest rate is astronomical
-Since you have no derogs, you don't have to worry about doing any PFD or any GW letters. I highly suggest referring to this thread: http://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/ABCD2199-s-Eleven-Rules-to-Credit-Rebuilding/td-p/5074148 because it has the basic building blocks you need.