How to repair damaged credit?

[kalabalu]

My best friend is going through a painful divorce and has herself in a real financial dilemma. I am not sure what to suggest to her. It is a long story so I won't go into the particulars, but she was left with a mountain of debt. She is feeling overwhelmed, and frankly so am I. We pulled her credit report off of a website and it was so low.... I am concerned for her. It was less than 500. Most of what was on her report is anywhere from 4-7 years old. Neither one of them were financially responsible and she has a lot of old collection notices from utilities, medical bills, credit cards. She does NOT want to file bankruptcy, but we are trying to come up with a plan to try and fix her credit. She can't get a car, cell phone, or even a credit card in her name. She only makes $30,000 a year and has probably $10,000 in debt. I am not sure how to help her. We are going to get her a secured card to get started rebuilding her credit.She tried a debt consolidation place a few years back with her husband, and the monthly payment was too high for them and the consolidation company couldn't get it any lower because they only have I think 3 or 4 years to pay back. I think the payment was $400 a month. Any ideas to beat the system and get these small collection notices off of her report? The average collection notice is probably $200 but she has over 30 of them. It is hard to keep them all straight!FYI - she does not have any equity (ie. a home) to be able to refinance. She makes about $30,000 a year and doesn't even have much leftover at the end of the month.

[Carlo_ice]

Hi. it does seem like a big problem.Ive worked with a card company before, and your on the right track.the best way to rebuild credit rating is getting a secured card, and again paying it off on time, and not going over the limit.also, try getting a card with a low credit limit for your friend, though it may have higher interest, it will help in rebuilding her credit rating.refinancing her debt will also help.It will take sometime to rebuid her credit, so be patient. also, try refraining from pulling her credit rating often, and make sure before applying for services that may require pulling a credit rating.good luck.

[johnandeileen2000]

Many people find themselves in this situation: the easiest way out is to declare bankruptcy, other than that she has to contact every company she owes money to and make an arrangement of make minimum payments on a regular basis, she must insist that interest accumulation be stopped and if approval is granted it's up to her to make payments that are acceptable.

[princess37]

Girl, I feel for her and what a friend you are for sticking with her through this. I went through a divorce four years ago and my credit is below 500 also. I had to file bankruptcy and it is not an easy out as some people think but it can be a way to start over. Many people think it is a way for people to get out of paying their debt but for some, it is the only way out. It does make it very hard to get any kind of credit. It seems like you are on the right track of trying to re build her credit but unless she can get some of those collections off her credit she will have a hard time getting any lines of credit. Has she tried a company who specializes in credit repair? I have thought about working with Lexington Law but I have not checked them out through the Better Business Bureau yet. If she can get some items taken off her credit report, she can possibly negotiate with her lenders. Is she living on her own or with friends? If she could split living expenses with someone, maybe she can save some money to pay down some of her credit? Good luck. Tell her I understand what she is going through.