*Business questions>>>Credit Questions

How can I have good credit again?

Question:
I have about $20,000 in credit card debt from four years ago. I have two student loans totaling approximately $7000 which are in default. I have a judgement against me for about $4300 from a credit card company. I have two overdrawn bank accounts that are closed. I have been in chexsystems before but I'm not sure if I am now. I think I have a few bad checks. I don't have a bank account now.

How do I fix this? I want to have a normal financial situation once again not this chaotic debt. I have $229 to my name and some spare change. What do I do? (Serious answers only please.)

Answer:
The fastest way to re-establish your history is by paying your current obligations -- it may take 2-3 years of this behavior to improve your credit score. And, you will need to take care of any judgements, etc.

Consumer Credit Counseling/Debt Reduction/Settlement Offers will NOT improve your credit -- these are all noted in credit reports. They may make it easier to pay off your debt, but creditors see this as not meeting your full obligation. While your credit score is important, most lenders look at other variables within a credit report --- CCC is a red flag for many lenders.

If you truly cannot repay your debt, it is smarter to declare bankruptcy instead of going through the CCC route. Most CCC customers deteriorate into bankruptcy, anyway. These agencies make a tidy profit (although most claim they are 'non-profit') from upfront fees, customer payments and/or settlement offers --- they rarely act in the consumer's best interest. One or two years after filing for bankruptcy, you'll get credit offers again (although not under the best terms), as they know you can't re-file for another 5 years or so.