Most Americans are fond of overspending. People buy things they do not really need. Once they see some thing that catches their eye, they buy it – often without even thinking of how they will pay for it.
People usually do this due to lack of will power or budgeting. And lots of them use their credit cards as a reserve once they run out of cash. They tend to spend a large amount of money in order to “keep up with the Jones'” or to make them feel better about themselves. Unfortunately, this never really works, and it causes a lot of damage in the long run.
Almost everybody has a credit bureau, maintained by a credit reporting agency. Many people have bad credit items on their bureaus, such as defaults, charge-offs, repossession, and slow payment history. This means that when these people apply for loans, mortgages, or credit cards, car loans or even for a simple bank account, they may be turned down.
Sometimes these people are not even aware of the negative information on their credit bureau. When this is not corrected, it causes them to have a bad credit.
Having bad credit can adversely affect virtually every aspect of your life. A low credit score means severe financial limitations and difficulties. As if this is not enough, there are hundreds, maybe even thousands of debt relief, debt consolidation, debt management, and consumer credit counseling companies that promise to “cut your payments in half”, “save you thousands”, or our personal favorite – “get you out of debt with the click of a mouse”.
If only your computer had the debt relief magic that all of those bad credit spam emails promise. Although getting out of debt cannot be done with a click of a mouse button, it is probably not as difficult as you think.
If you are in this kind of predicament, it is imperative for your financial stability that you do everything you can to repair your credit.
What is bad credit repair?
“Bad Credit repair” is a common term often used to describe a systematic process of rehabilitating an individual’s creditworthiness, financial credit reputation, or just raising your credit score.
You can try to repair bad credit yourself, and sometimes the steps are simple. However many people find credit repair a difficult and discouraging process.
You start by obtaining copies of your credit report, reviewing the credit report for errors, omissions, and misleading information, and requesting corrections to such information by means of a formal dispute. Often times, it can be beneficial to dispute every negative item on your credit, even if it is true. Not all of the correct negative items are always confirmed.
If you are worrying too much about your credit, conquer that feeling! No matter how bad your credit is, you can take the following steps to make it better:
1. Pay all of your bills on time. Decide if you have the income to meet all of your obligations. Remember, late payments (payments that are 30 days late or more) have a negative effect on your credit rating.
2. Reduce the number of credit cards that you have. This will reduce the tendency to overspend. Contact your creditors about your plan and perhaps close some of your newer accounts. Keep your older credit cards, and pay them off. It helps your credit to have very old accounts that are still active.
3. Avoid bankruptcy. Bankruptcies are not the end of the world but it will be with you for years. It will stay in your credit report for up to 10-years and hamper your ability to get credit in the future.
4. Request in writing that your creditors reduce the interest rates on your accounts to lower the amount of your monthly budget that goes to just interest.
5. Monitor results and stick to your plan. Review your file every few months to make sure that any errors that you have disputed have been corrected. After a period of time inquiries will not count against you provided you have not been applying for credit.
These steps can help anywone with bad credit. If you are in that situation, do not waste energy stressing about it. Bad credit can almost always be improved or corrected.
* Avoid Overspending
* Establish a Realistic Budget
* Build a Financial Cushion
* Read and Understand Your Credit Report
* Get Mistakes on Your Credit Report Fixed
* Get Positive Information Added to Your Credit Report
* Negotiate with Creditors
*Set Up Your Plan and Start Now!