what should i do?
i had good credit about 3 months ago, score of about 780 and i paid my bills on time. then i got behind on 2 credit cards, one with a limit of 7500 and one with 5500. i still paid my other bills on time. now my score is about 550. as far as i know, the 2 cards is the only thing that is wrong. now i am back under my limit on both cards and i want my score back to what it used to be, or close anyway. my first question is how much will my score improve once my credit report reflects the cards under my credit limit again? my second question is i am barely making my minimum payments on everything so is a credit counseling agency, the ones you hear on radio and tv, the answer? a second job is impractical right now. i cannot get a consoladation loan from the bank because of my credit score. by the way, the credit counsaling firm i had in mind is creditguard.org.
Public Comments
- Your score will go up some, but certainly not back up to 780 now that you're back in the green. My best guess is that you'll be around 700 in 6 months if you stay on track and slowly decrease your debt. You could be back at 780 in about 3 years if you manage to get those cards paid off and never miss another payment. Making minimum payments isn't a horrible thing. It's obviously better if you can pay your debt down quicker, but don't beat yourself up too much if you're simply not able to. Your interest rates might be rising now that you has some missed payments in your history, but I doubt your rates are over 24% (2%/month), and minimum payments are typically 4% of the balance. That means your debt can be decreasing 2% (4% payment - 2% interest) every month even if you only pay the minimum. This assumes of course that you are not using the cards anymore. That is something you may wish to consider... Stop using the cards and you'll stand a good chance of coming out of this situation much better. If you are still using the cards, your balances are likely going up rather than down. That is unsustainable and you will eventually go bankrupt or be forced to work that 2nd job that is impractical (and very unpleasant). The credit counseling agency you mentioned seems like one of the better ones. I wouldn't go down that route unless you are sure you can't handle the situation on your own (ie stop using the cards and be sure to make the payments on time). But if you're overwhelmed by the situation then getting help like that is a good idea. One other thing you may wish to do is talk to your credit card companies (the customer service # on the back of the card or on the statement). Be polite and friendly on the phone and let them know you temporarilly fell on hard times in the past few months and that was the first and only time you will ever miss a payment. Ask if there is any way they can take the negative marks off your credit report. Be sure to mention your track record with each card (ie since I've had this card I've made 29 payments with no issues before this incident). They may not be able to help, but it's certainly worth a few minutes of your time to try and it can't hurt anything. Best of luck in your credit mending!
* Some answers may have been provided by Yahoo! Answers.