22 yr old credit questions and advice

Submitted by mintjuulpodluvr2000 t3_11ej7zr in personalfinance

Hi, I’m apologizing in advance if this turns into a small tangent. I’m 22 yrs old, just graduated college and currently making $20 an hr living in NYC. I have 3 roommates and my rent is only $825. I should be getting a permanent job offer soon making anywhere from $57k-$60k. I only have one credit card, with a limit of $500 that I cannot get increased, and about $15k in student loans that are currently frozen due to Bidens student loan forgiveness plan. I know that my CC will increase if I stay within my 30% utilization of my limit but that is so hard when my limit is so low. Unfortunately, both of my parents have died( mom when I was 17, dad when I was 20) and I only have one remaining family member. After my parents died, my grandmother became my provider and helped me with everything and what not. She even helped me get my first car, and put me as a co-signer so I could begin accumulating credit. This was great, but now it’s fucked me in the ass. Unfortunately, my grandma died in March of 2021 ( I was 20yrs old, still in school) meaning the payments being made towards my car stopped and I was not aware. Even worst, about 1 month before my grandmother died I got into a terrible car wreck and totaled my car. Basically,the payments for the car went unpaid for so long that the account got sent to collections, and since I was the next person responsible for paying ( was not aware ) it left me with a delinquent mark on my credit report. I understand that I should’ve been aware that I was responsible for the payments , however I was in zero shape or form to begin that whole process while dealing with an immense amount of grief , while also working on finishing my degree. My credit is now around 560 and I am so stressed and freaked out I don’t know what to do. I now understand that credit is so crucial , and am trying so hard not to beat myself up for letting it get to this point but that’s easier said than done. I couldn’t even get approved for the apartment I’m currently living in due to this and that is terrifying for my future. Basically I just need advice and guidance. Anything is helpful, and I’ll leave the amnt of debt I have down below. Thanks for listening :)

Car debt - $3,591 CC debt (1 card ) -$400 ( actively working on using more and paying off fully )

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Singer2024 t1_jaeeczf wrote

The only thing that fixes this is paying the debt and time.

It's not that much debt, certainly not enough for the stress you describe.

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mintjuulpodluvr2000 OP t1_jaeftbl wrote

Starting a payment plan for my car debt soon!! Would mt credit go up from this even with the delinquent marks?

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Singer2024 t1_jaege6i wrote

No, it won't. It's not like credit card debt where lowering utilization improves your score.

As time passes ( years, not months ) the impact of the delinquency gets less and less.

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dmcand3 t1_jaeee7l wrote

Okay, 1: stop being fearful of not having a good credit score - holy hell. Also stop “trying” to use more of your credit line to boost your score. Focus on 1: getting your full time job 2: work more or a second job if you want more money and just budget. Everything else will fall in line.

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mintjuulpodluvr2000 OP t1_jaefg2d wrote

So I shouldn’t use my card more often and pay it off more often to help boost it? There was a point in time where I didn’t use the card for months but unfortunately let the balance sit which was a killer. Also to mention I already work 40 hrs and am not allowed to receive OT. I’ve considered a part time job until I get hired permanently, but I already have limited time as it is :/

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dmcand3 t1_jaegiag wrote

No, you don’t use a credit card more because you want to boost a credit score. That’s a very stupid decision. Budget your money to the dollar and if you’re responsible with credit cards (it doesn’t sound like you are, no offense) - then use credit cards to pay normal expenses.

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mintjuulpodluvr2000 OP t1_jaeh0h6 wrote

So what is your proposed suggestion for helping raise fix my credit score. I do need to go up so I can get approved for my next apartment and eventually have more lines of credit. Obviously I’m not good with credit cards or finances or else I wouldn’t be in this situation Lmfao so not really offended by your remarks. I’m just sick of being paralyzed with fear and anxiety because of this and everytime I ask people for suggestions I get such an overwhelming amnt of diff responses

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dmcand3 t1_jaehtkh wrote

Yea, I’ve been there man. I was bad with finances too. Here’s the thing - you are getting different responses because this finance sub is filled with people that love credit card points and credit scores. The thing is, it’s just a number. Does it make some things easier? Yep! But it is absolutely possible to 1: get an apartment 2: get a house 3: get a car and whatever else without a credit score.

My advice is to stop worrying about boosting your score and start budgeting your money and making that part of your life better. You are admitting that you aren’t good with finances so trying to get more lines of credit or financing more is going to be a bad idea.

Look up Dave Ramsey and The Money Guys and you’ll be good to go.

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Ickyhouse t1_jaejqz2 wrote

Stop worrying about your score. Fix your debt. A good credit score should never be your top priority.

You are in collections. You have had a massive hit to your credit. Fixing that will be the best step.

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mintjuulpodluvr2000 OP t1_jaeh7dq wrote

Also to add , not as like more of an excuse or anything But my parents didn’t teach me literally anything regarding finances , so I’m really trying to figure everything out on my own

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dmcand3 t1_jaei3qv wrote

Dude, me too! It wasn’t until I was 29/30 until I realized how fucked I was with money. But I quickly got it in check and moved forward. Personally, I followed the Dave Ramsey program to the absolute T for getting out of debt and I utilize some other advice for investing, although Ramsey’s will work for most people.

This sub will throw you for a loop wanting you to go into more debt and get more credit cards for “points”. Just be careful.

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