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I’m a Female in My Late 20s and My Credit is Horrible. – Tayumika

“Dear Steve,

Hello, I am a female in my late 20’s and my credit is horrible. However, I have been focusing on cancelling my credit card debts and paying down my school loans. My goal is to purchase my first home in about 3 to 5 years. I’m also interested in investing but don’t know much about it.

My question is what is the best way for me to pay off my debts while also trying to save at the same time. Also, what would be the best way to increase my credit score since I know a bad credit score follows you for a long time. Thank you in advance for your answer.


Dear Tayumika,

Congratulations on working on this while you are still young.

The first thing that strikes me is your statement about closing your credit cards. Paying off the balances is fine but don’t close those cards. I need for you to get them current again and use them from time to time. The length of time you have had the card and new good use will help to increase your credit score.

You also need to get a current copy of your credit report and credit score from all three credit bureaus. If you follow the credit report link you can get it there. It’s the same report and scoring I use for myself. We need to establish a baseline and from that you can measure your progress upwards.

As far as building savings at the same time you are reducing debt. The secret is to adopt an approach that is not all or nothing. Directing part of your money to savings will lengthen the time it will take to payoff the debt. But so what. You really need to do both things at once.

I’d suggest opening a plain savings account and deposit 50% of the extra money you can afford above the minimum payment on the student loan. Keep sending the extra 50% towards the student loan.

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That savings is critical for two reasons. Not only will it help you to accumulate a downpayment but it will also be an emergency fund in case a surprise expense comes up that you would have had to put on the credit cards. Now, instead, you’ll have money in savings to pay for it instead of increasing your debt.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

1 Comment

  • Steve, thank you so much for your advise. I am currently working on paying off my credit card debts while keeping the cards and also saving for my emergency fund. I will keep you updated.

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