Credit Score - Help!?
I am a newly wed and my husband and I both have some issues with our credit. Both of our credit scores are in the 500 range. I recently pulled our credit reports so that we can start paying off our debt and increase our scores so that we can have a better score for our future and progress towards things such as a house, car, etc.. My question is how do I know which accounts to pay off first. We have a game plan of how much we are going to put towards paying off our old debts each month, but don't know how to choose what to pay off first. Please help.
Public Comments
- Since I can't see your credit report, I would say start with the accounts that haven't gone into collection yet if there are any. Beyond that it is hard to say from what you've told us! Go to my website and read through it. You will find somthing useful i'm sure. I went through ID theft and bankruptcy and had to start over after that so were not to far apart here. I got my score from 486 to 729 in a little over a year and my site tells how. If your going to make repairs to your credit, enroll in a monitoring service like Equifax 3 in 1! It's worth the cost (cheap really, less than $12.00!) because you will need to check your credit often.
- Here is how I went about it and I got rid of 5 companys very quickly. The debts with the lowest balance pay off first instead of making minimum payments. Like say the lowest debt you have is $200 then pay that off first and work your way up from there. Right there you just quickly got rid of 1 debt and brought your score up a bit. The larger balances for right now do the minimum payments. You will be suprised at how fast you get rid of the small debts and decrease the amount of debts you owe. 2 years ago i had 15 oustanding debts. Today I only have 4. There will be those that tell you to pay off the high interest ones first but then you have those small little debts just dragging about and it takes you 5 times as long to get all the debts taken care of. If you cant buy it in cash then save up for it. Those $50 shoes can wait a bit and those $300 shoping sprees a week. If your close are still lookin good then wait 9 months before buying any any new ones. If you smoke cut down, if you buy coffee every morning make your own (takes less time to do at home than stopping off some where any how), if you .like energy drinks limit to 3 per week. Save your reciepts and add up all the things that you culd have saved money on by doing it yourself or something that you could have just not bought at all. The phrase "its only a couple bucks" is now out of my vocab. I spent over $4000.00/yr with that phrase. I could have paid off those nagging little debts if i didnt look at stuff and go "its only a dollar/coupe bucks". Apply that money to your debt. Get your credit mended. My fiance read a book on all of this. We both were in financial ruin. Now we are on the way to being debt free. Between us both like I said I had 15, together we had 20, and now we are down to 4 debts. I am giving you the "nut shell" version of this book. I dont remember what it was called. My fiance read it while we were waiting in the never ending weekend line at the salon. The book was $12 at wal mart. Save that amount since it did take 3 hrs before we left the salon. That was the same price I paid for my hair cut. Not to mention that book has saved me well over the price of that hair cut I got. Good luck on getting your credit back on track!
- Payoff the the credit card with the highest interest rate first even if it means maxxing out the lowest rate cards.
- Make sure you check for inaccuracies, try using truecredit.com which is by Transunion, look at the ages of the debt also, you may have things coming off soon due to the 7yr thing. Try not to apply for anything new and also keep one or two cards open as you will need the revolving credit. Check what part of the month your credit card company/ auto etc report every month. If you have a low balance when they report ur score will be higher...
