Re: I have no idea where to turn

Posted by Mark Noonan (68.108.23.41) on August 01, 2003 at 16:43:23:

In Reply to: I have no idea where to turn posted by tazmin on August 01, 2003 at 16:24:15:

Depends on what you mean by really bad - your "credit score" isn't all that important; trust me on this one, I'm a credit underwriter and the score is just a short-hand which allows automated systems to approve or decline automatically. If you're going for a home loan, then a person will look at it - so:

Make certain that everything is paid off; if you cannot get everything paid off, then be sure its discharged in bankruptcy; but also keep in mind that you shouldn't go bankrupt if you can pay - no matter how much it hurts, its better to pay if you can; a bad bit of credit adversely affects you for 7 years, bankruptcy for 10. Never leave a debt hanging - it makes you look entirely irresponsible; no unpaid collections or accounts 30, 60 or 90 days past due.

Once you've settled your debts, it then becomes a matter of time. You say you've got two years - that is plenty of time. What you want to show is good after bad; in the end, it wont fundamentally matter how much bad you had as long as you don't have any recent bad and you've had nothing but good since the bad.

Get a credit card by hook or crook - use it each month, pay it off each month; make certain its entirely in your name. If it has to be a secured credit card, thats fine - but be sure its a card which reports as non-secured (there are some out there - the company I work for issues one; propriety forbids me from listing - just look around the web, you'll find it eventually).

If you get cracking now, lets say it takes three months to get your debts settled; then it takes two to three months before you can get the credit card you need (some companies wont issue even a secured card right after a bankruptcy - if you come across one that does, read the fine print very carefully; it might be a scam) - in this scenario, its 6 months from now and you've got your new credit card. The next year is vital - use the card each month, pay off the full balance (don't charge up too much; though likely you wont have a line in excess of $500 anyways) - some people think that it looks bad if you pay the full balance but that is just ignorance talking; what credit companies want to see is open accounts used frequently, paid on time and not over-used (credit companies don't like it if it looks like you're "living on your credit card") - save yourself a bunch of interest by paying the full balance each month.

After a year, you'll find your "score" is probably back in the mid-600's and you'll be able to apply on line sucessfully for normal credit cards - but most importantly for you is that you're credit report will show old bad/new good - you'll probably still pay higher interest than a good credit customer, but you'll get your loan.

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