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llc223

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All accounts in collections, credit now below 530, little income...what can i do to fix this?
I lost my job a while back and been struggling and slowly going downhill since. I used to have great credit for being so young (under 25) at 726. Now, all my accounts are in collections or have been charged off, I'm doing everything I can to get a job to get back on my feet but I have yet to make enough to be able to work on my credit so now my score is around 525. What sound I do?

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I'm sorry this happened to you. It stinks that credit scores are often more a reflection of lousy luck than your level of responsibility. 
Unfortunately your score is going to be seriously hampered by the derogatories for the next seven years or so. If the information being reported is accurate (and it sounds like it is) there is no point disputing it with the bureaus. They can't be removed; they will just have to age off. The good news is after two years all this will affect your score less, especially if you can get some accounts in good standing. 

Your best strategy is to try to crowd out the bad with some good. You will have to start from scratch with a secured card. Capital One and Discover both offer them, plus your own bank might. Keep a perfect payment history with it and watch your utilization. Six months later get another one. Once your score is in the 620 range apply for a store card. These aren't the best cards, but they serve their purpose for credit building because they're easy to get. A car loan would be an excellent thing to throw into the mix if you can, even though you'll get a horrible financing deal. 

Just to give you an idea how much the derogs affect your score, I had several pages of derogatory marks a few years ago. As each one fell off, my score went up about 15 points. When the very last one fell off, my score went up 55 points. 

Reply by
llc223

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What do you mean by "derogatory marks?" Just the accounts going into collections?

So, pretty much what youre saying is:

- Accounts out of collections: pay on time until paid off

- Accounts in collections: ignore? theres nothing i can do about them?

- Get a secured card asap

- Get a 2nd secured card in 6 months

- After getting the 2nd card, sit a wait until I'm in the 620 range...then get a store card

You said "your score is going to be seriously hampered by the derogatories for the next seven years or so." Does that mean it will 7 years for my score to really move at all? Or will my score slowly move up over those 7 years until the marks start to drop off, then I'll really get some good points.

Thanks so much!

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