I sincerely hope someone can help. My credit score is ridiculously low. It's 538. My payment history is 98%. I do have a couple collection items...but my credit has been way higher...around 660, with more collection items. Here's the issue. My credit card utilization is 95%. I have a total of 4 store credit cards, a car loan, 2 personal loans. Total of debt, would be around 19k. My payments total around $820 a month. That is the minimum payment to keep things in good standing.Unfortunately I have fallen prey to predatory lenders that I'm paying 40% APR or more monthly.

Here's an example of 1, I have borrowed 2300.00 in May 16. As of July 2017 I owe 2399.00 I pay $220 monthly. Should be paid in full as of Aug 2018.

My problem is I can't afford to live paying these high interest loans. I even borrowed more to try to have money to live on and pay the other things I owe. And the reason for my high credit card utilization is that's the only way I can buy anything.

I have a car loan paid in full and even paid off early, and 2 personal loans paid in full from my credit union that don't seem to reflect in a positive way and all 3 were in good standing. And having these 3 loans since 2011 that I paid off, my credit union will not help due to my credit score. I don't understand since I have been a member since 2004 and paid off 3 loans with no problem. I feel I have proven I will repay what I borrow.

I have a good payment history...but can't consolidate to get a decent APR that I deserve having such a awful credit score. I have nobody to help, and I have tried so hard to be on time with my payments and building my payment history. I literally am drowning, and every dime of my money is going to paying creditors and I honestly don't even have enough extra for anything at all. Is my only option bankruptcy? The bad thing is, my payment history shows my credit worthiness, but with my low score nobody decent will bother giving me a chance. I'm at the end of my rope and so frustrated that I've tried to do right and it doesn't even seem to be acknowledged.

Can someone please give me some advice? I can't keep going like this.

  • Where are you located? Why not file bankruptcy?
    – quid
    Commented Jul 21, 2017 at 23:07
  • Im in TN. Thats basically my question..if bankruptcy is the only option. Commented Jul 21, 2017 at 23:24
  • 2
    Bankruptcy may not be the best choice for you. How old are you, what's your income, and what are you total monthly expenses including the $820 for payments? If you cut some expenses and maybe get a second job, you may be able to knock out the $19K of debt in under two years. Then your credit will shoot way up. Bankruptcy affects you for 10 years.
    – TTT
    Commented Jul 22, 2017 at 0:57
  • I recommend the book The Total Money Makeover by Dave Ramsey. It was written for people in your situation.
    – Ben Miller
    Commented Jul 22, 2017 at 3:46
  • 1
    Your credit rating is not ridiculous--it quite correctly reflects that you're overextended and at the very edge of not being able to pay. Commented Aug 26, 2017 at 3:35

2 Answers 2


Looking back

I have a car loan paid in full and even paid off early, and 2 personal loans paid in full from my credit union that don't seem to reflect in a positive way and all 3 were in good standing.

But you also

My credit card utilization is 95%. I have a total of 4 store credit cards, a car loan, 2 personal loans.

So assuming no overlap, you've paid off three of your ten loans (30%). And you still have 95% utilization.

What would you do if you were laid off for six months? Regardless of payment history, you would most likely stop making payments on your loans. This is why your credit score is bad. You are in fact a credit risk. Not due to payment history. If your payment history was bad, you'd likely rank worse. But simple fiscal reality is that you are an adverse event away from serious fiscal problems.

For that matter, the very point that you are considering bankruptcy says that they are right to give you a poor score. Bankruptcy has adverse effects on you, but for your creditors it means that many of them will never get paid or get paid less than what they loaned.

Going forward

The hard advice that we can give is to reduce your expenses. Stop going to restaurants. Prepare breakfast and supper from scratch and bag your lunch. Don't put new expenses on your credit cards unless you can pay them this month. Cut up your store cards and don't shop for anything but necessities. Whatever durables (furniture, appliances, clothes, shoes, etc.) you have now should be enough for the next year or so.

Cut your expenses. Have premium channels on your cable or the extra fast internet? Drop back to the minimum instead. Turn the heat down and the A/C temperature up (so it cools less). Turn off the lights if you aren't using them. If you move, move to a cheaper apartment. Nothing to do? Get a second job. That will not only keep you from being bored, it will help with your financial issues.

Bankruptcy will not itself fix the problems you describe. You are living beyond your means. Bankruptcy might make you stop living beyond your means. But it won't fix the problem that you make less money than you want to spend. Only you can do that. Better to stop the spending now rather than waiting until bankruptcy makes your credit even worse and forces you to cut spending.

If you have extra money at the end of the month, pick the worst loan and pay as much of it as you can. By worst, I mean the one with the worst terms going forward. Highest interest rate, etc. If two loans have the same rate, pay the smaller one first. Once you pay off that loan, it will increase the amount of money you have left to pay off your other loans. This is called the debt snowball (snowball effect).

After you finish paying off your debt, save up six months worth of expenses or income. These will be your emergency savings.

Once you have your emergency fund, write out a budget and stick to it. You can buy anything you want, so long as it fits in your budget. Avoid borrowing unless absolutely necessary. Instead, save your money for bigger purchases. With savings, you not only avoid paying interest, you may actually get paid interest. Even if it's a low rate, paid to you is better than paying someone else.


One of the largest effects of bankruptcy is that it forces you to act like this. They offer you even less credit at worse terms. You won't be able to shop on credit anymore. No new car loan. No mortgage. No nice clothes on credit. So why declare bankruptcy? Take charge of your spending now rather than waiting until you can't do anything else.

  • 1
    "So why declare bankruptcy?" Because it wipes the slate clean....
    – quid
    Commented Jul 24, 2017 at 8:17
  • 3
    @quid Only if you can get a discharge bankruptcy. Given the circumstances, creditors might insist on a restructuring bankruptcy. A discharge bankruptcy also means wiping the slate clean of assets as well as debts. Either form of bankruptcy can persist on one's credit report for up to ten years. $19k debt versus no chance of a mortgage at a decent rate for ten years? It seems a steep price to pay. And that's assuming a discharge bankruptcy. If creditors can get a restructuring bankruptcy, there's both $19k debt and a bad credit report. Not to mention legal fees.
    – Brythan
    Commented Jul 24, 2017 at 12:20
  • By the looks of the numbers this person likely isn't earning above the state median income which means they can file a chapter 7. Also completely absent from the question is any talk of assets, which you get to keep up to the state exemptions anyway, it's not like the trustee shows up to sell your clothes. You asked rhetorically why file, you file to wipe the slate clear. The people filing bankruptcy are already in a horrible financial situation, it's pretty much a myth that the bankruptcy filing hurts ones credit. Though bankruptcy is not a first resort, it's far from Voldemort.
    – quid
    Commented Jul 24, 2017 at 15:28

It sort of sounds like you want to contradictory things: (1) to fix your credit so you will be able to get loans and (2) to have more money available to spend now.

It sounds like the latter is probably not possible. Not without getting into a worse situation than you are currently in (based on what you have written the next step is payday loans and the like, which is basically financial suicide).

Fixing your credit is simple. It's just not fun. Cut your spending. Cut it way, way, way down. You will certainly have to change your lifestyle. I'd suggest taking a second job. Make the minimum payment on everything, then put all your extra money toward the most pressing things:

  1. Highest interest rate items
  2. Items that will affect your credit score the most

I would focus on the former. As you pay down your debt your utilization will go down, and this will raise your score automatically. When you pay off your highest interest rate debt, don't change your spending. Instead put everything you were putting to that to the next highest debt you have. Continue until your highest interest rate loan is at or below the mortgage rate.

When you get to this point you will notice that your credit score is vastly better and you are no longer spending all your money on interest. You will probably be in a position to buy a home. And you will have the satisfaction of knowing you did it yourself, rather than having a bankruptcy judge force you to change your lifestyle.

A note on the items in collections: make sure they are all legit. If any are wrong, it is pretty straightforward to contest them with the credit bureaus and get them taken off. Things in collections will drop your score severely.

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