subject: You Can Get Yourself Out Of Bad Credit [print this page] People have bad credit for different reasons such as uncontrolled debt, sudden loss of job, divorce, illness or unexpected circumstances. Whatever the reason is, bad credit is not a hopeless situation. It is a relief to know that it's possible to get out of bad credit.
If you are in the same situation, you should get the right information, exercise your rights as borrower, and be prepared to do what it takes to repair credit the right way.
You Have Bad Credit - What Should You Do?
Now, let's take a look at the steps you can do in order to be free from poor credit.
Clean up your credit report. If your credit report contains error, you may have a much lower credit score than what you deserve. In some cases, another person's credit file may get mixed up with your file which can worsen your rating. It is also possible that there are negative remarks older than seven years left in your credit report.
You can have these errors and misinformation corrected by sending a letter to the credit bureaus. According to the Fair Credit Reporting Act (FCRA), all consumers have the right to dispute inaccuracies in their credit reports so you should take advantage of this privilege to improve your own credit.
Understand the root of the problem. What has led you to poor credit? Is it a result of unfortunate circumstances beyond your control or is it due to uncontrolled spending and poor management of personal finances? Understanding the real problem can help you work out a lasting solution so that you can stay away from bad credit.
Work out a budget. In order to keep up with your monthly payments, you need to make sure that your monthly income is distributed according to your priorities. Create a budget plan that you can follow for the coming months. To save money, you may need to exert extra effort or give up some of your personal whims. Nevertheless, rest assured that your sacrifices will be rewarded once you improve your personal credit.
Apply for new credit. Another way to boost your credit score is to apply for new credit. Of course, if you have low credit, it would mean applying for a secured credit card or a bad credit loan. The primary purpose for acquiring new credit is to show creditors that you are capable of managing debt and credit. With this in mind, you need to be able to submit all your payments on time.
Seek professional advice. It will not hurt to consult a trusted credit counselling agency or a non-profit credit counselling group for budgeting tips or financial advice. However, it is crucial to make sure that you are dealing with a legitimate organization since fraudulent credit repair groups also abound in the market. Visit the National Foundation for Credit Counselling (NFCC) and the US Trustee's website (http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm) to see a list of trusted credit counselling agencies that are nearest to your location.
