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Credit Screwed at the age of 22 :(

I am 22 years old with a poor credit score. I have had problems financially since I was 16 and living on my own. I currently only have one account open for collection and I've been considering bankruptcy as an option. I'm afraid of that word to be honest. Is there anyone who can help me understand how bankruptcy can help or hinder me. I notice when you apply for credit you are asked if you have filed for bankruptcy before so I assume creditors look down on that. Also how does it affect a credit line I already have open. I recently got a fingerhut account (all i could get) to try and help with my credit a little by using it as wisely as one can use an overpriced, high interest site.

Also I know that bankruptcy may be a little dramatic when I only have one collection open. But my score being 540 I'm afraid I may not have very many options and a fresh start may be what I need. I don't want to rent for the rest of my life. I just signed a lease for 5 year agreement and realized I can't do this forever.

Thanks to anyone who can help,

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Bankrupty is not the right choice

A bankruptcy will stay on your credit report for 10 years.  It will hold your score down for quite awhile.

I don't think you could have accumulated enough debt to make it worth the cost.  The cost is generally about $3000 + to file. (attorneys don't work for free!)   I don't suggest it unless your debt is at least 3 times your annual income, not including school loans, because they can't be discharged in bankruptcy.

Sorry to say that a Fingerhut account probably won't help your score either.  I have never heard of them reporting to any of the Credit Reporting agencies, though I may be wrong there. 

What you need to do is figure out a budget and stick to it.  Educate yourself on what good credit management is.  Use sites like this one to learn how.  There are many more sites that offer free credit info as well.  There are blogs and articles that can help.

Depending on what that item in collections is, you may have a couple of options: Of course you can start making payments, that will help.  You could do an "offer and comprimise" if you can scrape up enough cash to pay them a substantial portion of the balance. But the account may not be old enough for that.  It also depends on the type of account it is. 

if you'd like a little more one on one advise, drop me a line at  EddyTXatYahoo.  I'm not a financial advisor or any type of financial expert.  Just a guy that paid off a lot of debt and moved my score from 500 to 750. 

Good Credit isn't about how much you have, it's about how well you manage it.

Good luck

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