Debt Problems
How to Fix Your Lousy Credit Rating
Having a poor credit rating can be debilitating because it can impact your plans. Maybe you’re at a point now where you can be responsible about your credit and want to buy a house, buy a car, and look good on paper. A lot of people make mistakes with their credit and go on to later on buy a house, a car, and improve their credit rating substantially.
How do you fix your bad credit?
It used to be a matter of getting your credit score and manually fixing all your old mistakes and then just waiting for them to disappear because enough time had passed. You used to be able to wipe the slate clean after 7 years. But today it can also be about your credit score as well as your credit history that impacts your ability. Even once your bad debts are paid off and your file is empty, new lenders will look at your score and how many inquiries are on your account when they consider approving or declining your credit application.
Even if all your old mistakes are in the past, you might need a decent credit score to get ahead.
Tips for Rebuilding Your Credit
- A bad credit car loan. High risk car loans will come at a high interest rate and you might need a big down payment but the regular payments can show up quickly on your credit report as positive feedback. A lot of car loan places will lend to high risk customers because the car is collateral and because they can make more profit on the transaction due to price premiums. The extra money you pay ‘may’ be worth it for building your credit
- A prepaid credit card. Pre-paid credit cards have interest rates and they hold your money (and typically keep the interest) but this is a good way to show regular payments and credit responsibility. After time has passed the company may transition you to a regular card and credit your balance (read the fine print before signing up, though!)
- A high interest loan. You can take out a high interest loan with collateral and pay it back on time. Some people simply leave the money in the bank so that it can get paid back
- Save money in a high interest savings account and get a loan using it as collateral
- Ask your creditors to take your bad reviews off. If you arrange to pay a bad debt, they might remove their bad report so use that as a bargaining chip when making payment arrangements.
After you begin to re-establish yourself, stay on target and stay on budget. Check out the money jar budget for tips about living lean and saving for the future!
Staying on the Money Diet Wagon
If you’re dieting to lose weight you know it’s a bad idea to go to McDonald’s or Baskin Robbins. So it stands to reason that if you’re on a debt diet, you should stay away from the mall unless you have a list in hand and just the right amount of money. This might mean that you research a purchase before you go and only take the correct change with you if necessary. Once you’ve developed self-control you can go to the mall with your debit card in your pocket.
The mall can be a dangerous place filled with temptation everywhere so until your new budget is well under control it might be worth staying away from. What’ll you do for entertainment? Try looking at free things to do in your city that won’t require you to spend money.
Even the grocery store can be a dangerous place to go when you’re trying to be frugal so prepare before you go and for heaven’s sake do eat a meal before you go. Thou shalt not grocery shop hungry or you could blow your debt diet as well as any lifestyle changing diet as well.
Financial Resolutions
Are you ready to start a new year with a new outlook on money? Don’t let this be a resolution that wears off by January 31. If you resolve to change your spending habits and stick to it, you’ll have a brighter future.
Have you got the recession blues or even just the recession fears? There’s never been a more important time to be careful with your money. The state of the economy doesn’t indicate that things are going to get better any time soon and those who live on cash and get out of debt will be in better shape to ride out the financial storm that’s upon us.
How do you get out of debt when your income is down?
It’s important to cut expenses and pay your bills on time as much as possible. Do MORE than the minimum payment and you’ll inch your way towards being debt free. Strive ot save money and for every bit of money you save, use that to your advantage by: stocking up on essentials, putting money away for emergencies and paying down your debt.
Bargain hunting is fun once you get started and you can even get your family in on the challenge to see who can find the family ways to save money. From saving on your hydro bill to your automobile expenses to groceries, you can cut corners here and there that can help you get debt free and have more disposable income!