How to fix credit after job loss

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wilson

Member
So I used to have great credit, sitting comfortably in the 700s, but everything fell apart after I lost my job in April. On top of that, my ex drained my savings on drinking, leaving me in a really bad spot. To cover basic living expenses, I had to rely on credit cards and even took out a personal loan. Things spiraled, and I couldn’t keep up with the payments. That personal loan ended up in collections for around $3,000, and I still owe about $800 on my credit cards. Between the late payments, maxed utilization, and the collection, my score has dropped to around 500.

Now my lease is ending soon, and I need to move to a new city. I feel embarrassed about trying to get approved for an apartment with my score this low, but I also know I can’t put off moving. Living with roommates isn’t an option for me — after an abusive relationship, I really need to have my own safe space.

The good news is I just started a new job less than a month ago and I’m finally earning again (about $77,500 a year). I need around $5k to cover the move, and I’ve been slowly paying down what I owe. I’m just not sure what strategy gives me the best chance of improving my score quickly. Would it help to pay one card down to 10–30% utilization, or should I focus on a credit-building account? Would opening a new line of credit help at this stage, or just make things worse?

I’ve never been in this situation before, and honestly, I feel a lot of shame about how far things have slipped. But I want to take control of it and do whatever I can to make sure I’m in a better position when I move in a month or two. Any advice or tips from people who’ve been in a similar spot would mean a lot
 
Man, first off, congrats on getting a new job at that salary ...... that’s a solid bounce back. The most impactful thing you can do for your score right now is utilization. If you can pay down one card to under 30% (ideally under 10%), you’ll probably see a decent jump. Collections suck, but they matter less over time, especially if you keep everything else current. I’d focus on those cards before opening anything new.
 
I was in a similar boat a few years ago. Lost my job, lived on credit, ended up with a collection too. What helped me was paying off the smallest card first and then throwing extra at the next one ...... snowball style. My score climbed faster than I expected just from lowering utilization. Don’t worry too much about the shame part, man, a lot of us have been there.
 
Not to be the downer, but new credit is not the move. Every hard inquiry dings you, and with a 500, approvals are unlikely anyway. Lenders will smell blood in the water. Better to just hammer down existing balances and keep everything current for 6 months. Then maybe look at a secured card if you really want another tradeline.
 
If your lease application is stressing you out, consider offering a bigger security deposit up front. Landlords sometimes care more about steady income than credit. $77k a year is strong, and proof of employment can go a long way. Credit recovery takes time, but housing is immediate, so tackle that with income proof + deposits.
 
Lol, welcome to adulting hard mode. But seriously, you’re actually in a good spot now because you have stable income again. I’d hit that $800 card debt first because it’s small enough to knock out quickly. Once your utilization drops, your score will look less like a horror movie. Credit building accounts are fine, but paying what you already owe is faster.
 
If that $3,000 collection is recent, maybe call the agency and see if they’ll do a pay for delete. Not every collector does it, but if they agree in writing, it could help your score massively. Just don’t give them a dime unless you have it documented. If not, still paying it off won’t hurt — at least it stops further damage.
 
I’ve rented with trash credit before. What saved me was having a cosigner. I know you said roommates aren’t an option, but maybe a family member can cosign? Otherwise, focus on showing proof of income and savings. Some smaller landlords will look past the score if you’re upfront.
 
Honestly, don’t feel ashamed. Credit is just a number that shows how banks trust you, not your actual worth. You lost a job, things spiraled, it happens. The fact that you’re even posting this means you’re already doing better than most people who ignore the problem. Focus on steady payments now, and you’ll be fine in a year.
 
If you want a quick hack for the move, try calling your credit card company and asking for a limit increase. Sometimes they’ll approve it even with rough credit if you’ve had the account for a while. That way, your utilization drops instantly without paying anything down. Just don’t use the new limit to spend more lol.
 
Another angle: you might qualify for a credit-builder loan through your local credit union. They basically lend you money but hold it in a savings account while you make payments. It builds positive history without much risk. But yeah, I wouldn’t do that until you get your existing balances under control
 
As someone who went from 520 → 690 in about a year, I’ll say this: consistency beats quick fixes. I paid off my smallest card, set up autopay for minimums on the rest, and put all my extra cash into the next balance. My score started moving after 3 months. The shame never helps, action does. You’re already doing the right thing.
 
Skip the credit repair companies if you’re tempted. They’ll promise the moon but mostly just send letters you can send yourself. Nothing they do you can’t DIY. Best use of your money is paying down the debt and keeping current. Save the $100 a month fee for extra payments.
 
$77k is a great salary, but just make sure you don’t overextend with the $5k moving expenses. Could you negotiate moving costs with your new job? Some companies reimburse relocation if you ask. Even partial help could keep you from adding new debt while you’re trying to dig out.
 
If I were you, I’d attack the $800 credit card first to drop utilization. Then, I’d save up at least one month of rent as a cushion so you don’t end up back in the same cycle. That $3,000 collection will sting for a while no matter what, but at least if your active accounts look clean, your score will start climbing again.
 
I know it sounds dumb, but don’t close those credit cards when you pay them off. Keeping them open helps your utilization ratio and your average account age. Close them and your score tanks further. Just lock them away in a drawer if you’re worried about using them.
 
Hey, credit nerd here. Scores are heavily weighted on payment history (35%) and utilization (30%). Collections hit payment history, but utilization you can fix faster. Paying that $800 balance down to under $80 would give you the biggest immediate boost. New accounts (10%) hurt more than they help right now.
 
Don’t beat yourself up for the ex drained my savings part. People love to act like financial mistakes only happen to dumb people, but real life is messier. You’ve already cut that weight loose. Now it’s just about rebuilding, and with your income, you’ll bounce back quicker than you think.
 
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