I would first find out if there is outstanding balances try to make some sort of payment arrangements even if its 20.00 a month it takes longer on your own but maybe a specialist can help you sending the appropriate letters and condensing some of the bad items. within a yr it will be tough to live on cash only basis but you will be greatfull when your score is over 600

Contact the companies you owe to. Explain your situation and inform them that you are willing to pay in full but would like to stop all interest and fees if any are being applied. Make arrangements to pay on the balance. Even small amounts like $20-$30.00 Pay the most you can without starving yourself. Some may say that you must pay the full balance or nothing but the truth is most companies will be willing to work with you as some money is better then no money. Especially, with the current environment we are in, they will take any money they can get. How long it will take will be up to you. The fast it's paid off the sooner you can work on building better credit. I personally would not file bankruptcy or use a fly by night credit consoler. Most of these companies lump everything into one payment but only pay a small percent on your debts and keep the rest for themselves costing you more money and time. If your debt is in collections it may be harder to do but can still be done by yourself. Don't let the companies bully you. None the less, you are making a wise decision in being responsible for your debts that will eventually pay off greatly! Good Luck

That is great that you have 2 cards that you are paying on time and in full but until you take care of your collections and previous debt your score will not improve.

If I may suggest, I have the perfect solution for your situation. It is called a Debt Management Program. It is not a loan nor a settlement, it is a program most people are unaware exists. The program was created by creditors themselves in order to recapture the original principle owed to them instead of risking loosing it, and at the same time allowing you to get out of debt about 75% faster while keeping your payments around the same, or in most instances, actually lowering the payment. This way, most of your payment will go towards your balance which will allow you to save a significant amount of time and thousands on interest. It works by making one simple payment that is distributed to all the creditors for you at lowered prenegotiated rates they are willing to offer you for being on the program. Being on the DMP, most creditors will give you the benefit of waiving late/overlimit fees, plus they will report your account in good standing so it will also help you rebuild your credit if you have deliquencies. It is a win win solution that can lower your payment, save you thousands on interest, pay off your debt 75% faster, plus help your credit at the same time. Neither is there a need to pull credit or be within a certain Debt-to-Income ratio. If you would like to find out more about it, dont hesistate to contact me with any questions, ill be more than glad to help, you should try this # (877) 219-9024.

Well, the good news is you are addressing the issue. It seems you made some mistakes (which we all have, believe me), but you are young, so you have plenty of time to correct them and spend the rest of your life using good debt to your advantage instead of bad debt to hurt you.

The 2 cards with low limits is a great start. It is crucial to continue to pay those bills in full, each month. Also be aware that 30-35% of your credt score hinges on your debt to credit ratio. You said your unsecured card has a $400 dollar limit and I am guessing the secured card is $500 or maybe $1000? Say it is $500. Your total available credit limit is $900. You want to try to keep your debt/credit ratio around 20% or lower. Try not to charge more than $200 a month across both your cards. You can damage your score by having a high debt/credit ratio. Conversely, you can do damage by having too low of a debt/credit ratio as well. Just keep it low and pay your bills the day they come.

Now the bad news. I hate to break it to you, but if you have 13 bad accounts listed on your credit reports, it is extremely unlikely that you will rectify your situation within the next year. Realistically, bad debt accounts take years to go away. Usually seven years from the last payment.

Payments made on collection accounts usually restart the clock. Worst case scenario, you will carry a trade line for 7 years after you make your last payment. You can try to negotiate with collection agencies (CAs) to "pay to remove" or haggle with them to try to reduce the listing to "paid as agreed" or something of that nature, but don't be too optimistic. Most CAs are not going to go out of their way to help you.

You can send out validation letters. It can't hurt. Just remember to get everything in writting! Here are a few things I have read or learned 1st hand about dealing with CAs-

Never call a CA. Send everything certified mail/return receipt requested.

Never send any money UNTIL you have a written agreement of terms in your hands 1st. When you do send money, send a money order, not a personal check.

Personal information wise, NEVER give them more than your name and address.

Never sign anything you send them. I have read about peoples signatures ending up on other documents!!! This is a shady and corrupt business, it is imperative that EVERYTHING is in writting.

I have learned from going through this experience that the best thing to do is keep paying your bills on time, try to settle your debts as best you can and don't obsess about your scores. It is like watching your stocks go up and down. It will drive you insane! They will get better, in time, if you do the right things.

I hope this helps.

P.S.- The posting above me (Shoyos) sounds too good to be true. I would guess he works for an agency and is trying to sell you something. This process isn't difficult, but it ain't as easy as he is saying either. Just a thought....

I haven't read the other posts here but I do know this. My buddy had a score of like 450 and here's how he gained 200 points in a year.

My buddy went to the bank, pulled out 2 x $250 loans and had it deposited into 2 seperate savings account then deposited 100 into that account. The he had the bank setup automatic payments from this account back to the loan for a year. This raised his score a lot.

Now this will NOT teach you anything credit related but it will for a few bucks help you raise your score

That is true. Any loan or Installment debt is a good way to build up good credit, as long as you pay it off on time! I take out a personal loan from my bank every five or so years ($1000 or $2000) to do just that. I take the loan and dump it right into mutual funds or some sort of investment. Win/win situation.

Time is the best way to rebuild credit. I would just use your credit card and make the payments on time! As these relationships get longer they are more dominant in your credit history.

Taking a loan out to build credit is often referred to as the 'Stupid Tax' when it comes to your score. Credit is not something you HAVE to use!!!

Seems to me that paying interest and/or annual fees on credit cards that you use to pay for everything is "Stupid Tax". I believe that CCs should be used sparingly; charge small amounts, once a month or so and pay the balance in full the day the bill comes. Just enough to keep the account active.

Having some kind of loan can be important to repair/improve your credit score.

Don't forget that 10% of your credit score is based on the different types of credit you currently have. It will help your score to show that you have had experience with several different kinds of credit accounts, such as revolving credit accounts and installment loans.

If you get a collateral loan the way I mentioned in my earlier post and you make your payments on time, reinvest the actual loan, it shouldn't cost you much at all.

In fact, if you use a CD account w/a decent APR as the collateral and reinvest the loan, you might actually make a little money in the deal.

The other posters have mentioned great strategies, but I also think it is important to remember that it will take a lot of time. Another strategy you might want to try is becoming an authorized user on a parent or spouses account that has good credit if someone like that is available to you.

You can get two secured Bank of America credit cards that you can use for monthly expenses and then pay off the balance every month, you can add to the savings amt to get the balances up to a max 10k each. This will show you establishing new credit and your score will go up after time if you keep the balance super low or at zero. Also,
We use a credit repair specialist for our mortgage clients with bad credit, he gets off all the negative items except for pending or rolling lates and pending BK's. It takes several months to almost a year in some cases. These 2 strategies should get your score way up after a year.

Pay down your credit card debt and other debt.