Millenial Moves Out

Millenial Moves Out
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#1

Hey y’all, so I’m planning on moving, in about 4 months, preferably into an income based apartment, but the problem is that I have bad credit. My score is like 540 or so, but I’ve never had a credit card in my name, I’ve never made car payments to a dealer because I paid it in full or made payments to family, and I’ve always lived with family members so I don’t have any credit history. The only thing that seems to be affecting my credit is a medical bill, that I never received therefore I wasn’t aware of it, from about 2 years ago, but it’s roughly $500! That’s a lot of money for me, and I don’t make that much hourly, I do work full time (40 hours), but I’m worried that it won’t be enough to get me into the apartment complex without having to put a lot down for the first few months.
I don’t have anyone willing to cosign and I have to find a place by June 31st or I’m on the streets. I’m also unable to get a second job due to an injury that I am currently in physical therapy for.
Please help.
Is there any advice as to what I can do to improve my credit score in such a short time? Or should I just try to save as much money as possible before I have to move? Or is there any other advice you might have for me? I am open to taking all the advice I can get.
P.S. I have taken Dave Ramsey’s FPU course before, but I’m still in my early twenties so a lot of it was still confusing.


#2

Hello Floridagal96, and welcome to the NerdWallet community!

It may not feel like it at the moment, but knowing your score and making a plan four months before you need to move puts you in a much better position than finding out at the last minute.

Sorry you are having such a tough go of things, creditwise. Really irritating when a bill you never received tanks your score. In four months, you might be able to help your score, particularly if there’s very little in your credit file now, which seems to be the case.

Have you ever looked at your credit reports to make sure information is accurate? (You are entitled to a free copy of your credit reports every year from AnnualCreditReport.com.) You will want to check TransUnion, Equifax and Experian. If you see inaccurate information there, you can dispute it.

You can also help your score by adding positive information. You can do that by opening new accounts, and there are a couple designed for people in your situation — credit-builder loans and secured credit cards . A credit-builder loan releases the borrowed money to you only after it is repaid (you would need to be able to afford a monthly payment; I’ve seen as little as $25). A secured credit card is backed by a deposit, and its limit is often the same as your deposit (if you go that route, be sure you keep balances very low relative to your limit). Recent positive information can help offset negative information like that medical bill.

Another possibility is to become an authorized user on someone else’s card. If you have a close friend or relative with a well-established card with an excellent payment record who would be willing to add you as an authorized user, that might help. While authorized users can use the credit card without any obligation to repay the money, there is no requirement that they use the card (or even possess a physical card). If all you are looking for is a boost to your score, you could ask a relative, and even agree to cut up the card as soon as it arrives (or have it sent to their address for them to destroy). Do be sure they have excellent credit, though. Otherwise, this won’t help.

Finally, it’s possible to find a place to live without a good score.

And you should definitely be saving as much as you can. A $500 starter emergency fund can help keep surprise expenses from becoming financial disasters.

Again, congratulations on getting ahead of this and starting now to improve your score. Let us know if we can help further.