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Posts Tagged ‘Rebuilding’

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.

Rebuilding Credit

Tip # 1: Live Within Your Means

The secret of that is this it is not your income that decides if you are a great  credit liability or a poor one but rather how you handle money. You could be earning $7 per hour and still paying your bills and meeting your credit responsibilities – in which case you will have terrific credit.

Tip # 2: Don’t Select Bankruptcy As An Easy Out

While a bankruptcy will depress it even further, at least it will give you the chance to repair your credit by giving you a “clean slate” no charge from large  expenditures.

Tip # 3: Track Your Money
For a month, attempt keeping a daily record of every penny you spend – including the money you spend on phones, the money you spend on tips, everything. You will be amazed where your money goes. Keeping track of your money that way does two things

Tip # 4: Get Insurance
Insurance for health, your car, your home, and for liability must help you avoid the huge legal and medical expenses this may occur from an accident or sudden problem. For a small monthly fee, you are covered against unexpected events that may drain your finances and leave you with out-of control debt.