One day you’re making good money, taking care of business and paying all your bills on time…
The last question on your mind is “How do I fix my credit?”
Life is good. You’ve got good credit and your scores are up there. You can afford to get that nice car and home because you’ve got the great credit it takes to qualify for the low interest rates that are available right now.
Then all of a sudden, it feels like your life became twice as stressful.
You get hours cut, laid off or have a medical issue and it’s not so easy to pay all your bills on time. Whatever it is that sets you back, you’re wondering why this has happened to you and asking how to fix it.
You are not alone.
Millions of Americans have recently experienced this and are struggling to pay their bills, or their credit has already taken a dive
Mortgage modifications are on the rise and many homeowners haven’t even gotten a firm resolution to their problems yet. Creditors are making life harder for everyone, including their well qualified customers, so is it any wonder that people’s credit ratings are taking a nose dive? Okay, so your credit has gone to hell. How do I fix my credit, you ask? Is it even possible? Not to worry, you can fix it.
Even if you are in big debt, you can get out of it and start living your life again.
The most important thing you should know is that you can take care of this all on your own without having to pay big money to credit repair companies or file bankruptcy. So, get those thoughts out of your mind.
How do I fix my credit before it’s completely tanked? Here are a few steps to help you get started.
Call your creditors
Yes, this is the most painful part, but it’s essential in trying to understand this step when you are trying to fix your credit. Even if you cannot make the minimum monthly payments as they are set right now, you may be able to negotiate lower interest rates and payoff agreements.
Didn’t know that? Lots of people don’t and it’s not something that the credit card companies are likely to tell you either.
It makes sense when you think about it: why would your creditors tell you that you can negotiate lower interest rates? It takes money out of their pockets and puts it back into yours.
Here is another important thing to do:
If you still have your accounts and they are in good standing, see if you can pay more than the monthly minimum to bring your debts down but keep the account open.
Making sure to not have the amount of credit you’re using any higher than 30% of your available credit can keep your score up even if you have a late payment or two on there.
Make a budget with your existing income and expenses.
This is the part that I really struggled with, but when you ask yourself, “How do I fix my credit?” you are trying to keep your credit scores up there, this might be one of the most important things you can do. You can get a budget guide from the Credit Repair Doctor.
If you have to cut your expenditures on your credit cards to essentials such as gas and groceries, then do that and make sure to carry only a small balance on the card. Okay, this part hurts a little, but it will be well worth it; cut your pleasure spending (you know, going out to dinner and expensive perfume…) from once a week to once a month.
Don’t let your debts get the better of you.
Creditors make money off of your late payments. You’ve probably seen where they tack on interest and late fees for when you’re behind right? Stick it to them and take this extra money away from them!
Learn your rights.
Okay, just because you have some debt doesn’t mean that you don’t still have rights. Know what those rights are that can take you a long way toward ensuring that your creditors don’t harass you. Check out the Fair Credit Billing Act: http://en.wikipedia.org/wiki/Fair_Credit_Billing_Act
Harass? You mean when they tell you they are going to take your first born child into slavery that’s harassment? It may not get that extreme, but creditors will try all sorts of tactics to get their money. Don’t let them!
Remember that this is only temporary and keep that in mind! Just because you’ve hit a financial road block doesn’t mean that it’s the end of the line for you and your future.
It’s miserable and it hardly seems fair, this whole credit roller coaster, but you can make it better. You can get your credit rating up and get back on the road to financial freedom, but you have to take control of your situation.
Here is another resource worth checking out: FTC on Building a Better Credit Report