If you have found yourself in debt and with bad credit, don’t despair. There are steps you can take to get back that good credit rating you once had. Here are 3 tips that can help you build a solid foundation and get control of your finances again.
Know upfront that you are not alone. Life happens to all of us. Your credit may have taken a hit due to a loss of a job, unexpected medical bills, or any number of different reasons. But that doesn’t mean you just throw in the towel and give up.
1. Set Up A Plan
The first step to take is putting together a financial plan of action. Yes, it is going to take some time to get out of debt and regain your credit rating. No doubt about that. But you need a plan moving forward that you can follow. Actually, it is really two plans as I will explain.
First, set up a plan for paying off your creditors. Even if it is a much smaller amount than the minimum payment for now, at least set up a plan to pay something. You’ll find that lenders will work with you in most every case if you just give them a chance. Don’t avoid this step because if you do it will make getting back on your feet again take years longer.
The next plan is one for setting up a budget and living within it. I know that doesn’t sound all that exciting, but it is vital. Be sure to pay any extras that you used to charge on credit cards… with cash. If you don’t have the cash then you can’t get the item. This forces you to know your limits and to stay within them.
2. Get A Secured Credit Card
Once you have your budget and you are on your way with your new plan, apply for a secured credit card. Yes, you will have to put up cash deposits in order to use it, but that’s ok. The credit card company is going to report your payment history to all 3 credit bureaus, so that is a great thing since it will start the rebuilding process for your credit.
Look for credit card issuers with matching deposit amounts in available credit, and ones with lower interest rates if you can. Once you get your new credit card, use it for purchasing small items only. And then pay the bill off every month.
For example, buy a new shirt or pair of pants with it, and then pay off the entire bill the following month. This is going to help you build a solid credit foundation.
3. Establish New Lifetime Habits
It is very difficult to break old habits if the cause of your credit problems is due to overspending. It is basically a life changing experience, but the good news is that once you begin doing it, the process gets easier. You will begin getting more wisdom in regards to the choices you make with your finances. And before you know it your credit will be stronger than it was before.
Next, go to this website atHigh Risk Personal Loans where you will find information and tips on all types of personal loans with bad credit.