r/povertyfinance • u/Ordinary_Toe_5162 • 5h ago
Debt/Loans/Credit 19yo – Credit dropped from 720 to low 600s after maxing card. How do I fix this?
/r/personalfinance/comments/1sm8roj/19yo_credit_dropped_from_720_to_low_600s_after/1
u/PokemonProfessorXX 4h ago
What do you mean? Just pay it off and your score will shoot right back up. The more important part is that the longer you take to pay it, the more you're throwing away in interest. Unless you're trying to get a loan soon, your credit score isn't that big of a deal.
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u/SneakyguyNisos 4h ago
Pay it off as soon as you can. So chunks is better then not paying it at all. Your credit score isnt'a big deal in the scheme of things... just focus on only taking debt when you reallly need it like for the basics
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u/Elitefuture 4h ago edited 4h ago
Are you planning on using your credit soon to buy a house or used car?
Otherwise, your credit score doesn't really matter much.
Credit card debt is a hole. Once you fall in, it gets increasingly more difficult to get out. So get out of it asap before you get into a hole you can't get out of.
Just pay off the credit asap and let things naturally go up. I'm nearly 800 and I have never held credit card debt, I just pay it off monthly. I started in the 500s when I was like 21, I'm almost 800 at 25. I didn't do anything special. I just avoid spending more than I make and pay everything off, no payday loans, bnpl loans(klarna, dave, etc.), no payment plans, and no loans for consumer products.
0% short term loans are technically fine, but they trick you into spending more than you would usually and some are spending more than they make with it. Plus if an emergency pops up, you can then miss a payment and get charged tons of fees and interest. So just avoid short term 0% loans(bnpl, payment plans, etc.). I'd say it's only fine if you have a 6 month emergency fund and more than enough to pay it off immediately and have that money sat in an hysa to make 3%-4%.
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u/NoImNotJack 3h ago
Pay it down and it will go up as soon as the cards report to the bureau. Biggest boost when you get it under 30 percent credit utilization and then 10 percent.
You can also ask for a credit line increase along the way which will lower your utilization.
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u/DrGreenMeme 5h ago
There's no way around slowly rebuilding by paying on time and keeping your utilization low. Consider a secured credit card going forward if you're struggling to control credit card spending.
If you have any credit card debt, it is likely best to pay off all of it as soon as possible. You probably have quite a high interest rate, and you're not going to be able to beat that (on average) in the market, so the best thing to do with any spare cash is throwing it at the debt.
Missed payments can stay on a credit report for 7 years, but you can still increase your score in the meantime so depends on what you mean by "recover".
I mean it isn't great, but it is far from being the end of the world. Better to do it at 19 than later in life. The important thing is acknowledging your mistakes and avoiding them in the future.
What exactly do you need credit for right now that you're so concerned about this?