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fnajdek

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HORRIBLE CREDIT. what would be best?
i have a horrible credit score, but i am also very broke.. and i think if i were to just try and rebuild my credit then it would take me years. i cant even get approved for an american eagle card.. it would take me some time to save money to file bankruptcy.. but would it be best to just try and do that? please help.

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Bankruptcy vs paying

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It really depends upon your circumstances which would be better, to try to clear everything up or to file bankruptcy.  I've done both and both mess up your credit record.  A bankruptcy clears everything at once so that when your state's time limit for bankruptcy reporting expires, all the problems are erased at the same time.  Also, with a bankruptcy, your creditors can't keep reporting late payments after the date you file, stopping negative input.  However, working with a credit repair agency that will help to consolidate everything into some manageable payment looks better on your record.  If your problems are due mostly to medical bills or some other major debt like a foreclosure, bankruptcy is a good option to make you feel like you are moving forward.  However, if you can figure out a way to pay off the debt another way (if it's smaller) a lot of companies will even take 1/2 or 3/4 of the amount due off if you pay a lump sum.  Once you have figured out the route you want to take, understand that it will be about 5-7 years before your credit starts to look like you want it to.  The best thing you can do in the meantime is not to pay anything else late and not to accept any other credit until you have cleared up the old stuff.  Then, buy a used car or get a small credit card and charge a little bit, pay it off over a couple of months, and then charge a little more.  Making payments over time increases your credit faster than paying the whole thing off at a time.  Good luck!  It takes a long time, but when you see your score start to rise, point by point, you WILL feel great!  Promise!

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Specifics

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Need specifics on your exact situation to give appropriate advice - age, current credit score, amount of debt (and break down - who/where do you owe), current income/potential earnings (like are you going to school and your income will change), and assets - like do you own a car (value/still paying?), house etc.  Without specifics you won't really be able to get appropriate advice on your situation.  Please elaborate on your situation.

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payoff or bankruptcy

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 You could try to negotiate your current debt down to a more manageable level, that makes the most sense and will help you start rebuilding. Call your creditors and talk with them or get some help from someone who can negotiate. Bankruptcy is not the easy way out that you might think. You should try your best to pay off your debts, you accumulated the debt, now it's time to pay.

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