There is Never an Impossible Credit Situation
Many people in bad credit situations feel that it is too difficult to turn things around. I myself have felt that way with credit card debt. Not long ago I let my wants put me in serious debt. Buying things on credit is very easy and very dangerous in less than a day I was thousands of dollars in debt with some nice things. This put me in the paycheck to paycheck wasteland. However, with planning and discipline, I managed to turn things around, improve my credit score and purchase my first home. This short list is some tips that you can add to your toolbox to hopefully help you get back on track.
First create a budget
- This is the hardest and most important part of any credit turn around. I read an article not too long ago that “Millenials” I don’t know how my generation got branded like that but I guess that is what I am, at least that is what my boss keeps calling me. However, the article said that a lot of people under 35 spend most of their income on disposable items. Like alcohol, food, hotels and other enjoyable activities that cost but do not have financial returns. This bust any budget and is more of a habitual thing than anything finding a way to stick to the budget is the first and biggest step into improving credit. More money in your pocket and the bank is the goal.
- Make sure that the budget includes savings, no matter how small the amount try to save some of your money. If your bills are most of your check and all you have left is money for groceries buy groceries and put the spare change in a bank. It adds up.
Discipline
- This is the key, really credit ratings are a number that banks use to decide how dependable a person might be. It does not seem fair however financially banks do not have time to get know every person that wants money from them so a quick look at was that number helps the bank make a decision. Also, more and more companies and government agencies are using credit scores to weed out applicants for employment.
- Taking steps to improve financial discipline will, in the long run, be beneficial. Simple things like buying groceries instead of buying fast food. Going to the farmers market instead of the grocery store. Cutting back on nights out and other things that are more weekly or even daily wants rather than needs.
Decide on what is a want and what is a need
- Make a list of wants and needs and decide what should be where and what can be removed. Understanding the difference between what is a want in your life and what is a need will give you more financial understanding
Figure out what your credit score is
- There are several ways to do this. Many people feel like paying a credit repair company is an easy way to improve the credit score. However, many of the companies are predatory recently the CFPB the Consumer Finacial Protection Bureau filed complaints and performed judgments against four Credit Repair companies. You can Google it to find out who, however, many people attempting to improve their situation are in a vulnerable situation and are taken advantage of.
- There are many free options that are not predatory however and can help you find out where your credit is and how to improve your score quicker than you might think.
Don’t Let it Get You Down
- At the end of the day you have to enjoy your life, stick to your budget, be disciplined and find a way to still do what you want to do. It took me one day to fall into debt and four years to pull myself out of it.
- In that time I still went out on Friday night with friends, I still had a cheeseburger here in there but I only did that if I knew I still had money saved.