Can someone help me on serious situation with my credit score?

Okay, I'm 21 years old and I live in apartment with my good friend. Ever since I was about 16, I've been independent with everything that involves financial issues. I pay for everything but I am working a job that pays 400 a week. I am currently 2500 in debt with 1400 in my bank account. I recently checked my credit score and it was 551 and its not getting any higher. What can I do to help rebound back to the way my life once was? Alot of the debt is in collections but its hard to reach them to work out a payment plan. Any options and do I have any hope for my future?

Public Comments

1. You will have to work hard on this situation. First, pay off some that you can. Then, do the monthly payment on all that you didn't pay off religiously - no absent, no late. Then, never again, you will borrow against yourself. everytime you borrow - or you charge - you are burrying yourself in the ground, so stop it. Not good for you. Well, at least you still have a little bit in the bank but - yah- it is off balance. And do not make it a habit to check your credit score - because you didn't need to. you are not buying a house or a car, why are you doing that? Everytime you check it - it goes down - don't you know that??? Stop it. Just try paying the ones that has a lot of interest on it. Ok? And don't buy anything for any friend. You are not in the position to do charity yet. Good Luck.
2. The collections are killing you. You need to get them paid off - I don't care how difficult it is to get a hold of them. I doubt they will negotiate anything other than payment terms. Then you need to get a secured credit card for about $1000 credit line (money is put in a savings account) - and keep your balance on it under $250 - pay it off each month. Everything paid off, and the credit card - and you will be on your way in about 12 months after that. Don't waste your money on credit monitoring services right now - just get your free report once per year from ALL three bureaus.
3. I use to work in collections. Here's 3 things you can do: 1) Try to settle the account. Be sure NOT to settle an account where you are being forgiven more than $600. If you do, you'll have to pay a tax on that and you'll have to fill out a 1099A form to do so. 2) Try and call the creditors to make payment arrangements. DO NOT get upset if they bombard you with questions. Its a collectors job to ask questions and they do have a right to know why the account fell behind. 3) Ask your creditors if they can adjust your terms or defer your account so you can bring it current. Most places will ask these questions 1) Why did the account fall behind? 2) When can you make a payment? 3) How much are you planning to make? 4) Where are the funds coming from to make this payment? and how often do you receive them? 5) Verify your name, address, phone number so the system can be updated.
4. I always pay over the minimum payment ( I owe 25, I pay 50) and I always make it on time. I noticed that one month I had to pay the minimum payment and it caused my score to drop 200 points! It usually takes 3 months of being consecutive to actually see a jump up in your score.. . .mine has increased to almost 900! ) It was 630 six months ago. If you want your score to increase you must pay more than minimum payment. If your behind, just try to catch up & you can still save your credit & increase your score. Good Luck ! )
5. I don't understand how someone can be in debt and have 1400 dollars in their savings? The money your saving should be going towards paying off your debt. To get out of debt your just going to have to curb your spending and focus on paying off your bills. You could go to a bank and try to get a consolidation loan or just pay it off through the collection agency. You have over 1000 dollars that could go as a down payment. 400 a week times 4 weeks in the average month means 1600 dollars a month. Even in a big city you can find a place with cheap rent. I live in down town toronto and pay 370 a month (including utilities). even if you found a place with 600 dollars a month rent, subtract 300 dollars for food and 200 for other bills (you could definatly spend alot less then that) you still have 500 dollars a month to put towards your debt. You would be debt free in 3 months. Then you would just have to make sure to only spend what your making to keep your debt under control.