Bad credit – How can a 19 year old young boy resolve this problem?
Problem
I am 19 year old boy with poor credit. I have defaulted on my single credit card. I don’t have any other credit cards. I am a young boy without any job. I do part-time jobs sometimes. However, at the present, there is no job in my hand. I don’t have other loans in my name. It seems that I have bad credit because of my young age. What can I do to build a solid credit history?
Solution
It is a misconception that you’ve bad credit because of your age. Lack of loans and credit has not resulted to poor credit. Your credit score is poor due to the lack of proper payments. You haven’t paid the bills on time, and this is why your credit score is in a bad condition.
I don’t want to be rude or harsh. You probably haven’t been able to make the payments due to lack of proper employment. You’ll have a difficult time in repaying the debts without a steady source of income. However, this is not an impossible mission. You can get out of debt and repair your credit through a proper spending plan, cash, a financial goal, a debt repayment strategy, etc.
You need to create a long-term financial goal. You’ll have to decide if you want to be debt free within the next 10 years. If you really wish to be debt free within that time, then start saving money from this very moment.
Devise a spending plan for yourself. Calculate your income and expenditures in a month. Your expenses should include everything. For instance: credit card bills, grocery bills, conveyance cost, etc. It is best to note down the expenditures every time you spend money. You can download a personal budgeting application in your smartphone for this purpose. Compare your income with your expenditures at the end of the month. If you find that your expenses are more than your income, then it is better to cut back your expenses.
You’ll have to find a way to pay off your credit card debt. You can take advantage of non profit debt management to repay your credit card bill. Once the debt is paid off, you can obtain new credit for building your credit history.
You can take out a secured credit card and use it to purchase new things. You’ll have to deposit a certain amount of money while taking out the credit card. Keep it in mind you’ll have to limit your expenses within the amount you’ve deposited against the card. Pay the bills on time.
You can ask your father to make you the authorized user of his credit card. Once your father adds you to the credit account as the authorized user, the account history will be added to your credit report. It will help you build your credit as long as the payments are made on time.
Finally, you can resort to passbook loans for building your credit. These are small loans issued by the bank. You’ll have to make timely payments just like the other loans. Do a little research before taking out a passbook loan. See if the bank reports to the 3 main credit reporting agencies – Equifax, Experian and TransUnion. Otherwise, it will be pointless to take out a passbook loan.
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