I lost my job went through some financial hardships over the past year, so I had to use my credit cards to stay afloat. I racked up about 10k in credit card debt on 2 cards (500 on one card, and about 9500 on the other). I couldn't pay them off so the accounts got closed. It sank my FICO credit score down to 490 so now it feels impossible to find somewhere to live. I'm working on paying off the outstanding balances, and getting back on track. Will my credit score stay that low until I pay off the full balances? Im not sure what to do or what options I have at this point.
Edit: I currently live with family, I currently have about 500$ left each month after rent not including basic living necessities(Food, gas, phonebill, etc).
Almost 10k in credit card debt at 26.
byu/Zealousideal-Sun4793 inCreditCards
Posted by Zealousideal-Sun4793
2 Comments
One non predatory way to build anything will be to have some responsible family member make you an authorized user and honestly I wouldn’t even give you a card. Them paying their own bill should help you. Sadly even paying them off you’re still going to be dead to creditors for a while. Those closed accounts in bad standing ain’t pretty.
Your scores will not immediately recover after paying off the balances. I’m assuming the cards were charged off, is that right? Or are they just a few months past due at this point?
For charge-offs, once you pay off the balances, they will stop being updated as delinquent each month which will allow the charge-offs to age and your scores will begin to recover. It will take a while (years) but eventually your scores will recover to a certain extent even with (paid) charge-offs present.
You’ll have to come up with a payment plan with the creditors, ask for hardship options, settlements, etc. to start working on paying down the debt. On the card that’s $9500, I would try to take care of this one because with that high of an amount the risk of being sued is relatively high.