Question about credit rating

Question about credit rating

My situation:

I have a lot of credit card debt, owe for a cell phone that is now shut off, and a dept store card.

I’m paying off the dept store card this month. My understanding is they will reinstate it. I want that just so I have some sort of credit to use around holidays. But I won’t get into debt with it.

I want to pay off the cell phone because I need a cell phone. But I’m not sure if they’ll give me another contract. Will they?

The credit cards are a lot – about $28,000. One of them will settle I only have to pay 20% of the balance. Very good deal.

That would leave me with $24,000 of debt, and those cards are charged off.

My big questions:

  1. can I save my dept store card and get a cell phone?
  2. is it worth settling the one card? i’d still have a lot of debt and lousy credit.

I guess I want to know if my credit rating gets a little better each time I settle an account instead of paying tiny amounts over years. Or, do settled accounts look bad and stay on your credit report for years?

A friend advised that I file for bankruptcy because it’s a faster way to better credit. Is that true?


I would really recommend you go to and get started on his baby step. The first step is to get current on all your past due bills and make a budget. Once that is done, then you focus on putting $500-$1000 in the bank for emergencies. You know it is an emergency when it is something you can’t anticipate like: car repairs or pet emergency or medical expenses. The reason you need this savings is so you won’t be tempted to charge on credit cards again and get bogged down in debt. Also you may get $500 payday loan very fast – but don’t use them too often.

You really need to find another way to pay for holiday gifts. The holiday comes the same time every year, so you have a whole year to plan. For example: if you spend $600 for Christmas, then take $20/week and put it in your savings account. That way you will have it all saved up and there will be no need to use your credit card! Won’t that be a good feeling to pay cash for the holidays!?

Once your cell phone is paid for, you should be able to get another one. If you can settle with the credit card companies, I would do that. They will “forgive” the rest of the debt. It will show on your account as a settled charge off. It is much better to have a “settled” charge off than just a charge off. Your credit rating will improve and you will be debt free that much faster!

You don’t say what your income is or other expenses like car payments or rent. This will make a lot of difference in how fast you pay off your debt and get on the road to financial freedom. Wouldn’t it be great to have hundreds of thousands of dollars in the bank instead of having credit card debt?! If you want to be debt free and have that money for yourself instead of sending to your creditors every month, you have to get intense about paying it off.

Good luck and keep us posted!

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