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Home > Reader Questions > My Credit is Ruined and I Just Got Laid Off. How Can I Improve My Credit Once I Get a Job? – Tina

My Credit is Ruined and I Just Got Laid Off. How Can I Improve My Credit Once I Get a Job? – Tina

I recently got laid off and I have a lot of credit cards and other bills that I can’t pay. I have no savings and I recently checked my credit score and it’s already being ruined. I’m afraid if I don’t get a job soon I’m never going to get out of debt or save my credit. I need help!

My debt is ruining my credit and I’m worried I’ll never get it in the 700 range and become debt free. Is there any ways or methods I can accomplish this once I get a job? If so how?

This is your chance to be a hero and help out this person by providing your feedback and answer to the question in the comments section below.

My Credit is Ruined and I Just Got Laid Off. How Can I Improve My Credit Once I Get a Job? - Tina by

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  • Joyras7

    I am glad you posted about this.  It is something a lot of people deal with.  Having your question and all these responses will hopefully help you, but also help so many other people.  Your situation is tough, but you did the best thing you could do-sought advice so that you can have a gameplan.  Hope things turn around for you!

  • Bamboo

    Hi Tina,

    First of all, figure out how to keep food on the table and a roof over your head, and worry about repairing your credit score after you have a new job. And yes, I myself have been turned down for jobs because my credit sucks right now, but I have been managing with temp work. Be willing to do anything legal and safe for any wages as long as you stay busy. THAT is more important to a hiring company. Tip: smaller businesses do not usually check credit. Any industry related to finance WILL, so you can avoid applying to them.

    The fact is that credit card debt and utilities are UNSECURED debt. These creditors have taken a calculated RISK to loan you money. They will do all they can to get paid, but it usually consists of just a psychological torment. They find the risk to be worth it, and our financial system allows them to deduct their losses. What happens first is that your credit score goes through a series of downgrades the longer you owe. The credit cards and anyone else will SELL your debt for pennies on the dollar. Sometimes, the debt-holder will sell your debt a second time. Everyone who sells your debt gets tax write-off, so don’t feel too bad about it. It’s an industry. And every time it’s sold, your actual debt VALUE goes down! 

    SO, Get a credit report from all three agencies, so you know the current debt amounts, as well as who owns those debts, or, brave-up and talk to the companies or collectors and ask them your amounts. Don’t whine. Keep the info you share to three things: “I want to know the actual value of my debt to you at this time”, “I am out of work and cannot make a payment plan right now”, and “I will try to call you back next week”. Whether you plan to call them or not. If they ask about the value of your debt to the credit card company, say “I don’t know.” If they tell you it was $12500, say, “Really?” If they want $25.00 right now, say “I don’t have it, what is the actual amount I owe you?” The purpose of this is not to avoid any agreements you can’t keep, and to not give them any info that will enable them to further harass you, and to FIND OUT WHAT YOU ACTUALLY OWE, given that debts bought and sold change value.

    btw, I found that most collector phone numbers are on the internet and you can learn not to answer the phone when they call. 

    Then go about your business of making sure you have food on the table. Get food stamps if you need to. Keep looking for work and taking whatever paying job comes along… Stay committed, or you will continue to spiral downward. No angel is going to come, and you probably won’t win the lottery. It’s all on YOU.

    Then make a decision. File for bankruptcy, or make payment plans? IF you have a job that earns equal-or-less-then the state median income, you can negotiate whatever works for you. If you make more, you may have to be extremely uncomfortable a while while you pay it down.

    But keep in mind: your credit will have dings on it until 7 years AFTER the debts are resolved. If it takes you 6 years to pay them off, that means 13 years of bad credit. A bankruptcy, on the other hand, will give you bad credit for 7 or 10 years, depending whether you file for C13 or C7.

    Most companies never will try to take you to court. But they could. And as long as you owe debt, or do not file bankruptcy, your credit will be problematic. That means forever, if you don’t pay the debt or file! Read more about bankruptcy at getoutofdebt.org, and make your decision, then move forward.

    Good luck!

    • http://GetOutOfDebt.org Steve Rhode

      Thank you for the long comment to help the reader.

  • K8zplace

    Hello

    I am sorry to read your news and have recently found myself in the same predictament…..I am at a loss of words.  I was feeling so awful but after finding ths site and reading of others in my shoes I am encouraged.  Such hard times we are living in…..I wish you well and I know these things will be behind us soon Take care and keep going FORWARD!!!

  • Nliley

    I have always been told to get a credit card or two, use it just a few times per month, and then make sure you are making payments on it every month.  Don’t pay off the balance completly.  Leave just a small balance every month.  This should help bring up the score over 6 months or so.

  • http://twitter.com/gerridetweiler gerridetweiler

    I would recommend you first deal with the immediate problem: the bills you can’t pay while you are unemployed. There’s no telling how long your period of unemployment may last, or what your salary will be when you do get a job, so your #1 job is to protect the funds you have available to get you through this rough stretch. I’d suggest you meet with a bankruptcy attorney to find out whether you may need to go that route –  or, at a minimum, to find out what creditors/collectors can and cannot do to collect from you if you continue to be unemployed. Depending on your financial situation, it may make sense to stop paying those bills and save up to file for bankruptcy. That’s something only you can decide, but I’d encourage you to get professional advice.  

    Once you are working again, you’ll be in a better position to evaluate your options as far as rebuilding your credit goes. I know it’s probably difficult to accept the damage to your credit scores in the meantime, but keep in mind you always get a fresh start. Eventually all negative information can come off your credit reports, and even before that happens you can start rebuilding your credit. 

    But it’s very hard to juggle two competing goals – dealing with your debt and trying to rebuild your credit. So focus on the debt and the job search for now, and accept that you can work on building your credit later. 

    • http://GetOutOfDebt.org Steve Rhode

      Excellent advice.

  • Msullivan

    Tina,

    Your credit rating is really just a measure of how well you pay your bills. Certainly the key to good credit is to control your debt. If you pay every bill on time and always pay more than the minimum due, it is likely you will have good credit. There is no magic and all the tricks really make very little difference.

    Most negative entries on your credit report disappear after seven years, so pay down your debt and wait. I’m sure you will reach your goal.

    Good Luck!

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